Coal ministry delays award of 5 more coal blocks

The government has put on hold the award of five coal blocks auctioned in the latest round, as it wanted to re-examine bids before signing agreement with the coal block allottees, allegedly on the grounds of bid timings and the amount of the bid, according to media reports.

The five non-operational coal blocks were bagged by companies like Hindalco Industries, Jindal Steel & Power and Jaypee Cement at close to the ceiling prices during last week's auction (See: Hindalco, Jindal Power bag 1 coal mine each on 3rd day of auctions.
and Jindal to pay Rs108 per tonne, Ruia Rs1,110 a tonne as coal blocks auction hits Day 6)

These coal blocks include the Tara Coal Block bid by Jindal Power at Rs126 per tonne, Brinda & Sasai block bid by Usha Martin at Rs1,804 per tonne, Meral Coal Block bid by Tirumala Ind at Rs727 per tonne, Dumri Coal Block bid by Hindalco at Rs2,127 per tonne and Mandla South block bid by Jaypee Cements at Rs1,852 per tonne.

The award of these blocks that were part of the second round of auction, could cast a shadow on the ongoing coal block auctions.

The government had previously also held back three producing blocks for similar reasons.

The coal block auctions have so far brought in close to Rs2,00,000 crore, which is more than the Rs1,86,000 crore notional loss estimated by the Comptroller and Auditor General (CAG) after the coal block allocation scam during the previous government at the centre.

On Saturday, the coal ministry declared the winners for eight of the 13 coal mines auctioned during 4-9 March. "Bids for the remaining five blocks are being examined. E-auction for most of these mines closed at just Rs2 per tonne above than ceiling price," a government official said.

The coal blocks from the previous round whose final results were yet to be declared include Gare Palma IV/2&3, for which Jindal Power was the top bidder; Gare Palma IV-1 (Bharat Aluminium) and Marki Mangli III (BS Ispat). An inter-ministerial committee, chaired by coal ministry additional secretary A K Bhalla, has placed its views on these three blocks to the ministry that is expected to announce its decision on the matter today.