A day after government rejected bids of JSPL and Balco amid speculation of cartelisation, the steel maker on Saturday said it is "puzzled" with the decision while stating that it followed a "consistent and prudent bidding strategy" throughout coal block auctions.
"We had followed a consistent and prudent bidding strategy throughout the coal block auction process, with a serious long-term business perspective. 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," it said in a statement.
The government had late last night announced canceling three bids -- two bids of Jindal Steel and Power (JSPL) for three blocks (Gare Palma IV/2, IV/3 and Tara) and one bid by aluminium maker Balco for Gare Palma IV/1 and said it would take a final decision on these mines after deliberations.
According to sources, the government is looking at options of giving the mines whose bids have been cancelled to either Coal India or states.
Coal Minister Piyush Goyal, however said, "The Department (Coal ministry) will take the final decision on the rejected bids, it will deliberate and then decide."
A Sesa Sterlite spokesperson Roma Balwani, however, refused to comment on the issue saying, "No comments." Balco is a subsidiary of Sesa Sterlite.
The government was re-examining the bids for nine coal blocks, including those where JSPL and Balco emerged top bidders in the recently held auction.
"Bids for Gare Palma IV/1, IV/2, IV/3 and Tara coal blocks not accepted," Coal Secretary Anil Swarup said.
However, bids for five other blocks have been accepted, he added. JSPL 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.
The JSPL statement said coal block auctions for Gare Palma IV / 2 & 3 and Tara coal blocks saw participation from 11 power producers (highest for any Schedule II Coal blocks) and 10 power producers respectively.
So far, a total of 33 coal blocks have been auctioned in two tranches. While in the first lot 19 coal mines were auctioned, in the second lot 14 coal blocks went under the hammer.
The JSPL spokesperson said: "The effective value of our bid for Gare Palma IV/2 & 3 stands at Rs 808 per tonne, duly factoring the complete discount on the ceiling price of Rs 700 per tonne and additional premium of Rs 108 per tonne."
"The effective value of our bid for Tara stands at Rs 1,096 per tonne, duly factoring the complete discount on the ceiling price of Rs 970 per tonne and a additional premium of Rs 126 per tonne."
Direct tariff benefit of approximately Rs 27,660 crore would be accrued based on the company's bid (Rs 11,469 crore from Gare Palma IV/2 & 3 and Rs 16,191 crore from Tara coal block respectively).
The gross value of the bid is pegged at up to Rs 58,572 crore, the spokesperson said. There had been reports that some bidders could have indulged in cartelisation to keep prices low for the mines concerned.
The bids that were re-examined also included Marki Mangli III block, which was bagged by BS Ispat.
While insisting that the government "has not looked at any such thing as cartelisation or anything of such sort", Coal Secretary Anil Swarup had earlier said: "I have used the word 'outliers'. There is a pattern and if somebody falls outside that pattern that needs a examination.
"Whether it is a cartelisation or not it not something which I can say as of now. We are certainly not examining these aspects. We are examining if there is an outlier, the reason for it, and then we will take a call", he had said.
