India Issues Guidelines for E-auction of 74 Cancelled Coal Blocks

---

Researched by Industrial Info Resources India (Delhi, India)--India's Ministry of Coal has released draft guidelines for allocation of 74 coal blocks, whose allotments were cancelled by the Supreme Court of India in September. The ministry plans to conduct two-stage bidding under the Coal Mines Special Provisions Ordinance.

Qualified bidders in stage one would be asked to submit financial bids under an electronic auctioning process. The bidding would be open to specified end-use projects in the power, steel, iron and cement sectors.

The tender documents, which are to be issued later, would specify the technical and financial qualification of participants in the auction. The ministry has also made public a set of draft rules under the ordinance.

Under the rules, the government plans to allow a successful bidder to use coal from the mine allocated to it for any its other plant after prior communication with the government.

The floor and reserve price metrics are currently being worked out. "The idea is to keep a lid on tariff rather than adopt a revenue maximization approach", said Coal Secretary Anil Swarup, adding that the reserve price will be determined before December 22, 2014, while the bidding fees will be based on geological reserves of coal mines. The auction process is slated to begin on February 11, 2015. The ministry hopes to complete technical evaluation process of allotment by March 3, 2015, and issue letter of award by March 16, 2015.

The Supreme Court of India quashed allocation of 214 out of 218 coal blocks that were allotted to various companies since 1993, terming the method as "fatally flawed." It had allowed the central government to take over operation of 42 such blocks.

The method for setting the reserve price at the auction has been developed by a committee comprising officials from the Department of Industrial Policy and Promotion and the Coal, Power, Steel and Mining ministries.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.