Jindal, Adani, GMR coal bids may be referred to CCI

The government is planning to refer the bids placed by Jindal Power, Adani Power and GMR for Gare Palma-IV/2&3 blocks in the recently concluded coal block auction to the Competition Commission of India (CCI), according to reports today.

The move comes in the midst of a court battle between the Naveen Jindal-promoted Jindal Power and the government.

Jindal Power had recently moved court against the government's decision to deny it the block. A wholly owned subsidiary of JSPL, Jindal Power had emerged the lowest bidder for this block, which the company was operating till it was de-allocated after a Supreme Court order in August last year.

The bid log shows that Adani Power Maharashtra Ltd and GMR Chhattisgarh Energy Ltd had pulled out of the bidding process after putting only one negative bid each.

"The bids received for Gare Palma-IV/2&3 coal mines could be anti-competition. Though the government said in its report that there was no evidence of collusive bidding, the procedure for bidding indicates anomaly in timing and bid amounts of participating companies," Business Standard quoted a source as saying.

The coal ministry was also considering the option of approaching an investigating agency to further probe the process of bid submission by the three companies, said a government official. The nominated authority for auctioning had earlier done a preliminary inquiry into the bids.

The bid log for Gare Palma-IV/2&3 disclosed that Adani Power pulled out of the race after its opening bid of Rs501 a tonne, while GMR withdrew after putting a Rs zero bid. The bidding concluded in two hours, at Jindal Power's minus Rs102. Negative bids for coal blocks for the power sector imply that the winner will charge a negative fuel cost to the power distribution company it will sell power to.

GMR went on to win Talabira-I in Odisha for a much higher bid of minus Rs478 a tonne, in an auction that went on for 10 hours. Adani Power won the non-operational Jitpur coal block, earlier owned by Jindal Power, in Jharkhand, for minus Rs 302, during the second phase of auction, officials pointed out.

Jindal Steel & Power Managing Director & Chief Executive Ravi Uppal, had, however, told Business Standard earlier that the government should respect the outcome of its own auctioning process. He had said his group had bid strictly in compliance with the procedure laid out by the government.

Among the bids received for the 40 mines auctioned, the coal ministry had not approved three bids.

These were the ones for Tara block (West Bengal), Gare Palma IV 2&3 (Jharkhand) with end-use power generation - both won by Jindal Power - and Gare Palma-IV/1 (won by Balco in the unregulated category). The Delhi High Court had on March 23 ordered the status quo on the Tara block and asked the government to file a reply in the case of the Gare Palma IV/2&3 blocks.