The recently held first round of coal block auctions under which blocks were offered to interested bidders in a transparent, multi-bidder and competitive mechanism has seen unprecedented gains of around Rs 1 lakh crore to the national exchequer. The success of the auctions of Schedule II coal blocks also garnered appreciation from Prime Minister Narendra Modi as well as Finance Minister Arun Jaitley on the floor of the Parliament.
However it is understood from sources that three coal blocks Gare Palma IV 2 & IV 3, Gare Palma IV-1 and Marki Mangli III - are being re-examined by the nominated authority. These blocks were bagged by Jindal Power ltd, Balco and BS Ispat respectively. Such re-examination may cause doubts on the entire auction process. If the process for these coal blocks is annulled, it would severely impact the investor sentiments and the second round of auction that is expected to commence from March 4. It is also likely to lead to many more court cases and even result in the entire process being stalled.
Earlier, the Coal Secretary Anil Swarup had outrightly rejected all rumours being spread by vested interests and had said in one of the conferences - "In one of the blocks, forward auction amount bid was only Rs 108 and suddenly there was this debate that this is very low but let me give you a number here. The value that is coming out of e-auction is Rs 1,679 crores, the value that is coming from royalty is Rs 1,523 crores, but the real value is coming out of the tariff concession that will happen, and that is Rs 11,469 crore. So the overall value that gets determined in that particular block is 14671 crores. It's a huge amount." The benefits from other two coal blocks are also similarly very high.
A spokesperson for Jindal Steel and Power ltd (JSPl) which emerged as the winning bidder for Gare Palma IV / 2 and IV / 3 said, "the coal block auctions were held on a transparent e-auction platform giving equal opportunity to every eligible bidder as shortlisted by the outlined process. We are glad to have emerged as preferred bidder in the transparent price discovery platform administered under the aegis of coal ministry."
"The reverse auction process applicable for regulated sector coal block auctions is a robust mechanism for price discovery in long term interest of the power sector. The reverse auction process will result in keeping the power tariffs affordable and also catalyse harmonious development of the power sector to bridge the shortfall," said an industry expert.