Auction of 29 mine blocks cancelled for Department goof-up

As per the current terms and conditions, only half of the highest bidders of the technical bidding round would be considered for next level of bidding.

Published: 03rd December 2019 08:27 AM  |   Last Updated: 03rd December 2019 08:27 AM   |  A+A-

Image of a mine for representational purpose (File photo | AP)

Express News Service

BHUBANESWAR: For a major goof-up by the Steel and Mines Department, the State Government has been compelled to cancel auction of 29 mineral blocks, notice inviting tender (NIT) for which had been floated in October.

While the Government has decided to cancel the auction of 20 mineral blocks, mostly iron ore and a composite of iron and manganese, another nine blocks are likely to face the same fate, highly placed sources in the Government said.

The Government had to take this step to save its face as some bidders including Arcelor Mittal and Adani Group exposed several flaws in the tender documents which could be exploited by certain companies to bid through their subsidiaries to eliminate competitors from second phase of forward bidding.

As per the current terms and conditions, only half of the highest bidders of the technical bidding round would be considered for next level of bidding.

“Companies like JSW have reportedly participated in the tender through as many as six subsidiaries, thereby eliminating equal number of competitors from the bidding process. This is supposed to cost the State a sizeable revenue through reduced competition in the auction,” sources familiar with the development told TNIE.

In a major embarrassment for the State Government, the Sarubali chromite mines of Misrilal Jain has been awarded to TS Alloys Pvt Ltd, a subsidiary of Tata Steel Ltd. Interestingly, Tata Steel was also bidder in the auction of the Sarubali chromite block and competed with TS Alloys in the bidding.

“How could the Steel and Mines department remain oblivious to such an important aspect when other mineral bearing states like Karnataka have already incorporated such provisions in their model tender document to avoid cartelisation and restrictive trade practices,” a senior officer having expertise in mines and minerals trade said.

Karnataka has addressed this issue in its NIT floated on October 18, the sources added.

The fate of the mineral blocks including 9 virgin blocks for which tender process has been completed remains uncertain at the moment, said a senior officer of the Steel and Mines department. The bidders, who participated in the tender process of the last phases including 20 expiring leases, will be refunded their security money, the sources added.

The State Government has to take a decision soon on next auction dates of these mining blocks considering the fact that leases of about 24 mines are expiring by March 31, 2020.

Bidding woes
20 mineral blocks, mostly iron ore cancelled
9 other blocks to face same fate
9 virgin blocks’ future uncertain
24 mines leases expiring by March 31, 2020

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