Govt rejects bids of Balco, Jindal Power for coal mines

Jindal Power Ltd and BALCO's bids for coal blocks have not been accepted after the same were re-examined for outliers in the bidding pattern.

An official source said late on Friday, "Bids for Gare Palma IV/2&3, Gare Palma IV/1 and Tara have not been accepted."

Jindal Power was the highest bidder for the Gare Palma IV/2&3 block with 155.49 million tonne of extractable reserves for Rs 108 a tonne. The block was reserved for the power sector. Its bid for the Tara block which was the highest at Rs 126 a tonne was also rejected. Tara has over 160 million tonne of extractable reserves. "We came to know about the decision past midnight. The reason cited being 'the highest bidder doesn’t reflect fair value', which we fail to understand as our bid was much below the ceiling price during the reverse auction process," a Jindal Power spokesperson said in a statement.

"We are puzzled with the decision and would make our best efforts to engage in a dialogue with the Coal Ministry and Government Authorities to present the facts," the spokesperson added.

BALCO's bid for the Gare Palma IV/1 block was also rejected. The company was the highest bidder with a bid for Rs 1,585 a tonne.

The Gare Palma IV/2&3 and Gare Palma IV/1 were producing blocks which were re-examined by the Nominated Authority first and subsequently an inter-ministerial committee. The decision on the blocks was taken late on Friday night.

Out of the 31 blocks that were auctioned till March 9, eight were under re-examination. Agreements for the winners of the remaining 23 blocks have already been signed and executed this week. The vesting order is expected to be issued by the Coal Ministry on Monday.

Also read: Coal auction: Jindal Power, Balco, BS Ispat may lose mines