Millennium Post

HC halts final bidding for three Chhattisgarh coal blocks

HC halts final bidding for three Chhattisgarh coal blocks
Delhi High Court on Thursday directed the government not to conduct final bidding till February 18 for three coal blocks in Chhattisgarh, for which Sarda Energy and Minerals Ltd has submitted its initial price offer on its plea challenging the two-phased auction process in which half of the round one bidders are to be eliminated.

A bench of justices Badar Durrez Ahmed and Sanjeev Sachdeva allowed the government to open on Thursday the initial price offers (IPOs) for the three blocks - Gare Palma IV/1, IV/4 and IV/7 - as well as announce the qualified bidders, who were in top 50 per cent of bidders, and said the same would be subject to final outcome of Sarda’s plea.

“In present case, although we have permitted announcement of qualified bidders, we direct respondent (Coal Ministry) not to conduct electronic auction (final bidding) till the next date of hearing on February 18,” the bench said.

The court also issued notice to the ministry as well as Hindalco Industries Ltd, Dalmia group’s OCL Ltd, Bharat Aluminium Company Ltd, Jindal Steel and Power Ltd, Jindal Power Ltd and Ultra Tech Cement Ltd - all of whom have submitted IPOs for the blocks - and sought their responses on Sarda’s plea by next date.

Sarda, represented by advocate Ratan Singh, has opposed the conditions in the auction process allowing multiple bidding by a company as well as removal of 50 per cent of bidders after opening of IPOs.

Under the auction process for blocks for unregulated sectors like steel, sponge iron, cement, only the top 50 per cent of bidders after opening IPOs would move to round two of electronic auction when final financial bids are to be placed.

Companies are also allowed to submit multiple bids by submitting IPOs in the name of its different bifurcated units.

During the proceedings, the court agreed “there is logic” in permitting multiple bidding, but questioned the two-phased auction process, saying “IPO was only to determine floor price and once the same is determined let them (bidders) all bid.
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