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Govt cancels 4 winning coal bids by Jindal, Balco

Govt cancels 4 winning coal bids by Jindal, Balco
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In a major blow to Jindal Steel & Power, the government on Saturday said it was rejecting three of its successful bids in the recently-concluded coal block auctions, along with one by Balco. The ministry had examined nine blocks whose surprise low bids prompted the designation “outliers”. But bids for five of those mines were accepted, Coal Secretary Anil Swarup said in a tweet message early on Saturday.

Although the winning bids for the nine mines were the highest in their individual auctions, they were low by comparison with the winning bids for other similar blocks. JSPL had won bids for the Tara coal block at Rs 126 per tonne and for the Gare Palma IV/2 and 3 blocks at Rs 108 per tonne. In comparison, companies had bid in excess of Rs 2000 per tonne for some of the coal blocks in the earlier rounds. Balco’s rejected bid for Gare Palma IV/1 was at Rs 1585 a tonne.

“Department (Coal ministry) will take the final decision on the rejected bids; it will deliberate and then decide,” Coal and Power Minister Piyush Goyal said on Saturday.

The Coal Ministry had rejected the bids of Jindal Steel and Power Ltd (JSPL) and Balco for four blocks amid reports of speculation of cartelisation during the recent coal block auction. When asked whether these blocks will be re-auctioned or allotted to Coal India, Goyal said the department will take a call on it. He was speaking on the sidelines of an event of Indian Chambers of Commerce.

Jindal Power had emerged as successful bidder for Gare IV/2, Gare Palma IV/3 and Tara coal blocks, while Bharat Aluminium Company (Balco) had successfully bid for Gare Palma IV/1 coal block.

However, bids for five other blocks have been accepted, Swarup said. There had been reports that some bidders could have indulged in cartelisation to keep the prices low for the concerned mines. “In the schedule II, we were looking at four mines and in schedule III we are looking at five mines ... Prima facie we found that it requires a re-examination, so it has been re-examined that is about all,” Swarup had earlier said. The bids that were re-examined also included Marki Mangli III block, which was bagged by BS Ispat.
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