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HC relief for Sesa, Sarda; coal auction as per schedule

Just a day before the coal auctions, multiple companies have won relief from the Delhi High Court on Friday. The court has asked the government to consider bids submitted by Sesa Sterlite ,  Sarda Energy and Usha Martin . These were earlier rejected by the technical committee.

February 14 is when financial bids for these coal blocks will be opened by the coal ministry. The High Court order will not be impacting the opening up of the financial bids as these companies had approached the court for not being qualified in the technical rounds.

This is definitely a relief for companies such as Usha Martin, Sarda Energy as well as Sesa Sterlite. Sesa Sterlite had bid for nine coal blocks and due to technical glitch it could not qualify in the technical rounds. However, Delhi High Court has now granted them relief.

At this juncture, what remains to be seen is how the coal ministry will include these companies since all the qualified bidders have already been chosen and are out in the public domain.

Financial bids will be opened for two coal blocks on Saturday – Talabira-I for the power sector and Sial Goghri which is for the non-regulated sector.

Coal secretary Anil Swarup says there will be no impact on the auction process and the government will abide by the High Court order.

However, there might be a day or two push for the coal blocks for which these companies have approached the High Court, but government will incorporate the court’s order and will ensure that they meet the deadline of March 31 to auction the 23 coal blocks it intends to.

Meanwhile, JSPL , after tasting some success with its earlier plea on end use, has now filed a fresh application on the compensation issue and this petition of JSPL is along the similar lines as another petition that is already pending before the Delhi High Court which is by GVK Power . The question being raised is on the quantum of compensation that is being awarded to prior allottees with respect to mining infrastructure, which is a subject matter of greater debate. There will be further hearing on the matter.

In case of Sesa Sterlite, there was some confusion with respect to the documents being submitted by them. They had submitted documents for captive power plant. The government was considering them with respect to an independent power plant, towards that extent the Delhi High Court has held that the technical committee will review and will judge upon whether or not Sesa Sterlite has qualified.

Usha Martin and Sarda had raised the question that while making the bids they were required to cite the total coal requirement, they had also included the coal requirements of their subsidiaries. The important clarification that the Delhi High Court has given is that bidders cannot include the requirements of their subsidiaries and that only the parent bidder will be considered and towards that end these parties have also been sent back to the technical committee.

A relieved GD Mundra, director, Sarda Energy says based on the company’s requirement, it will be able to bid. “Excluding the requirement of our subsidiary, so whatever mines because we have applied for six mines, so wherever we are qualifying based on our requirements, excluding our subsidiary requirement, we will be eligible to bid for that,” he told CNBC-TV18.

Several questions are also being raised by  Monnet Ispat on the extent of bids that is allowed per bidder. They have cited names of certain companies that are allowed multiple bids. Towards that extent, there was another order by the Delhi High Court subjecting even these proceedings to further High Court orders.


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