Indian Coal Ministry has announced to start the first phase of auction process from tomorrow i.e. 25 Dec, 2014. The ministry is going put 24 coal blocks under hammer in the 1st batch of Schedule II.
Post the SC’s order for cancelation of 204 coal blocks, which were declared as illegal, the government decided to auction & re-allocate these blocks in different phase. The government has initiated the first phase and planned to auction 101 blocks, which is divided in different schedules. In 1st batch of Schedule II, the auction process will start with 24 coal blocks from 25 Dec’14, as per special ordinance of coal mines and subsequent rules.
These 24 coal blocks is reserved for different sectors; 7 for power, 16 for cement, CPPs and Iron & Steel and rest one mine of Coking coal is reserved for Steel sector. As per the government, 4 mines shall be auctioned together namely Gotitoria East, Gotitoria West, Gare-Palma IV/2 and Gare-Palma IV/3, out of this, 2 mines will be provided to each allottee.
Auction Methods
Forward Auction – Companies related to Iron & Steel, Cement and CPPs will participate in forward auctioning method in which the qualified bidders will quote above the floor price that is set by the government.
Reverse Auction – Power producers will participate in this auction. In reverse auction process, the bidder, who will provide electricity at low tariff, will be the H1 bidder. The ceiling price will be fixed by the government and participants have to bid lower than of that.
Coal Secretary, Shri Anil Swarup stated, “The bidders, who have specified end-use plant, will only be permitted to participate in the auction. After in-house consumption, the winning bidder will be permitted to sell the surplus coal to CIL at respective bid price or notified price of CIL.”
E-auction Process
- Entire auction process will be transparent, efficient and will be conducted online
- Two documents Bank Guarantee comprising the bid security and an Undertaking status. All information should be factual and received in the form of hard copy
- The auction process include
(i) Techno–commercial bid for qualification
(ii) Financial bid (e-auction) for selection of successful bidder
- After the technical stage, only 50% of the qualified bidders will be allowed to participate in the e-auction process
Registrations will commence on 25 Dec’14. Last date for receiving technical bids will be 31 Jan’15 and list of qualified bidders will be placed on 12 Feb’15. E-auction of mines for qualified bidders will be held between 14 and 22 Feb’15. All details will be available on MMTC’s website.
Schedule II coal mines will be completed by 23 Mar’15 with the signing of Coal Mine Development & Production Agreement and the Vesting Order.
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