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Five days and 11 blocks into the first-of-its-kind coal e-auction and the government has already received Rs 60,000 crore (Rs 600 billion).
It hopes to cross the figure of Rs 15 lakh crore cited earlier from the re-allocation of the 204 cancelled block leases.
The e-auction began on Saturday and is seeing aggressive bidding, with the final bid 10 times or more the floor price.
The ministry of coal has successfully auctioned 11 blocks, four for the power sector and the rest for unregulated sectors.
The proceeds generated, which include royalty, would go to the states hosting the blocks. The amount generated through auction is Rs 52,610 crore (Rs 526.10 billion).
The government has a two pronged strategy for e-auction of the cancelled blocks. Where the end-use is generation of power, there will be a reverse auction. For the unregulated sectors of iron, steel and cement, there would be forward bidding.
Budget 2015: Complete Coverage
So much is the desperation for getting a block in the former case that companies have bid zero rupees, too. This, by the rules, meant forward bidding for the block and that the bidder would take the fuel cost on his account books, rather than passing it on to the consumer.
Blocks kept for the power sector, hence, got bids much above the reserve price of Rs 100 a tonne. Talabira-I went to GMR Chhatisgarh for Rs 478 a tonne, Sarisatolli to CESC for Rs 470, Trans Damodar was won by Durgapur Projects for Rs 940 and Amelia North got Rs 712 a tonne as the final closing bid from Jaiprakash Ventures.
Anil Swarup, secretary, ministry of coal, said for every Rs 100 decrease in the bid amount, the final power rate reduces by 6p a unit.
“Reverse bidding for the power sector ensures the auction does not lead to an increase in tariffs (rates). The bidder has to bid below the ceiling of the coal price that is factored in the existing tariff. As he bids for the coal price and keeps bidding it downwards, the tariff, too, keeps getting adjusted downward,” he told reporters.
Blocks for the unregulated sectors are also witnessing surging bids. The highest so far is for Chotia in Chhattisgarh, with a final closing bid of Rs 3,025 a tonne.
On the fifth day of auction, Tokisud North in Jharkhand received the highest yet winning bid in the power end-use section for Rs 1,110 crore (Rs 11.10 billion) per tonne by Essar Power MP Limited. Gare Palma IV/5 in Chhatisgarh, kept for the unregulated sector, had received the highest floor price till yet of Rs 2,050 a tonne. The last bid before the copy went to print was Rs 2,990 a tonne.
