India’s Ministry of Steel in a communication to its counterparts in the Ministry of Coal has sought a relaxation of auction rules for the allocation of coal blocks to steel companies, government sources said on Wednesday, October 3.
The sources said that the Ministry of Steel has suggested that, in the case of steel companies, the auction process should be carried to a conclusion even if there are less than three bidders, unlike the present auction regulations that the allocation process should be cancelled if there are less than three companies putting in financial bids.
It was pointed out by the Ministry of Steel that, of the five rounds of auction of coal blocks for deregulated sectors (sectors like steel and cement without any government price regulations unlike the power industry), the last two tranches had to be cancelled because of the poor response from companies.
Considering the tepid response among coal users in terms of bidding aggressively at the auctions, the entire process of re-tendering if there are less than three bidders is time consuming and has delayed projects being implemented by steel sector investors and hence the auction rules needed to be relaxed, the ministry said in its communication, the sources added.