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Business News/ Politics / Policy/  Round three of coal auctions set to begin on Tuesday
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Round three of coal auctions set to begin on Tuesday

The government on Saturday released the list of technical bidders for the first five coal mines up for grabs next week

The 29 coal blocks auctioned so far have fetched the government around `1.72 trillion. Photo: BloombergPremium
The 29 coal blocks auctioned so far have fetched the government around `1.72 trillion. Photo: Bloomberg

New Delhi: The third phase of coal block auctions are set to start on Tuesday. The government on Saturday released the list of technical bidders for the first five coal mines up for grabs next week.

Companies such as Hindalco Industries Ltd, Jindal Steel and Power Ltd and Vedanta Ltd will take part in the auction process. The mines made available by the government belong exclusively to the unregulated sector—that is, industries that use coal for manufacturing products such as cement, aluminium, steel and iron.

The latest round has received bids for several mines that were offered in earlier rounds but failed to find takers. Out of 10 mines on the block this time, six were offered earlier.

Two of the 10 coal blocks belong to schedule II (mines that were operational when the allocations were cancelled last year) and the rest fall in schedule III (those that were nearly operational when the allocations were cancelled).

The coal block auction, held earlier this year, wasn’t devoid of controversy as the government decided not to accept the closing bids for four coal blocks—three by Jindal Power Ltd and one by Bharat Aluminium Co. Ltd—submitted in the auctions.

The auctions also saw aggressive bidding in the power sector that has led to concerns for the viability of operation for power companies.

The 29 blocks auctioned so far have fetched the government around 1.72 trillion, giving credence to the Comptroller and Auditor General’s 2012 claim that allocation of mines over the years without auction had cost the exchequer 1.86 trillion.

The government has introduced one change in the auction rules this time around. Earlier, two or more bids from an entity with an end-use plant were treated as separate bids. Now, multiple bids from one company will be treated as a single bid. The top 50% of bids submitted get shortlisted for the next round of auctions.

Coal secretary Anil Swarup had earlier said that the government will execute agreements with successful bidders by 31 August and “so the process by and large will be completed by 31 August".

The process of coal block auctions was undertaken after the Supreme Court cancelled 204 allotments on the grounds that they were in violation of the law. PTI

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Published: 08 Aug 2015, 10:11 PM IST
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