Hurt by the lack of participants turning out for the fifth tranche of Coal block auction, Steel ministry has decided to talk Ministry of Coal regarding relaxation in auction rules.
In this regard, Steel ministry has started working in conjunction with Ministry of coal to make auction rules lenient for Steel Manufactures.
Earlier, Coal Ministry had indefinitely deferred fifth tranche of Coal auction specified for Iron and steel production on 6 Jul’17.
Although no official reason was cited for the deferment of auction, however according to the industry sources the action was taken as the Government had realised that the auction would likely fail to get favourable response from bidders and the valuation of mines would also be poor.
Steel Ministry acknowledges the fact that the number of bidders in the auction is always going to be limited, on account of limited number of steel companies that participate in auction. As many steel companies are in poor financial condition.
Steel Ministry has urged Coal ministry to carry on coal auction process, regardless of fears of lack of participation and the stipulation that minimum three valid bids not met for a given coal block should not result in deferment of the auction process.
The ministry wants to ensure auction rules to be transparently implemented and these should not necessarily be linked to a number of bids. In this context, the Ministry demands relaxation in minimum three valid bid rule so that the coal allocation can be allowed, even if there is just one bid.
It might be noted that it was the second case of deferment of coal block auction since 2015, and in both the cases lack of adequate response was cited as the reason.
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