The govt started scouting for agencies from the start of this month to commence the auction by December 22-24
The Union ministry of coal has selected government-owned MSTC as the agency to conduct e-auction of the mines whose allocations had been cancelled earlier by the Supreme Court (SC).
SBI Capital Markets Ltd (SBI Cap) has been made the transaction advisor for the re-allocation process. Earlier, the ministry had been mulling on whether to issue a tender for selecting an agency to provide e-auction platform and a transaction advisor for taking care of the financial activities involved in the re-allocation.
"Due to paucity of time, we decided to select a suitable organisation through inter-departmental discussion and vetting, rather than going through the whole process of tender and selection," said a senior official.
The ministry had worked out a schedule for the reallotment and was to appoint a legal and transaction expert, beside selecting an e-auction platform, by November 25. It started scouting for agencies from the start of this month, to commence the auction by at least December 22-24.
MSTC was earlier known as Metal Scrap Trade Corporation Ltd. It is a public sector utility with a Mini Ratna status and conducts e-commerce in several industrial products and raw materials. Through its www.mstcecommerce.com portal, it conducts e-sale of mineral products such as iron ore, imported thermal coal, chrome and manganese ore. Also, of agricultural and forest products such as tobacco, tendu leaf and timber, plus supply of shredded scrap to various secondary steel industries.
SBI Cap is a wholly owned subsidiary of the country's largest bank, advising on investment and projects, beside consultancy on fund mobilisation. The company is to evaluate financial bids for the coal mines, compensation and other payments.
SBI Cap, with other consultancy entities such as PwC, Deloitte and CRISIL, had participated in a bid to be consultant for coal mine bids during the 2012 auction under the previous government.
The SC had on August 25 ruled the allotment process by government appointed Screening Committee for the 204 mines over the past two decades had been 'illegal', 'unconstitutional' and 'without application of mind'.
The current government has promulgated an ordinance to reallocate the cancelled coal mines by March 2015, a deadline given by the SC. It has also opened the sector for commercial mining by the private sector.
In the first phase, 42 working coal mines and 32 in line to start production will be offered to developers with notified end-use projects in the power, cement and steel sectors.
SHORT CUT
- Ministry selected organisations for e-auction via inter-departmental discussion, vetting
- Selection via tender done away with due to “paucity of time”
- Ministry was to appoint a legal and transaction expert, besides selecting an e-auction platform, by November 25
- SC had on August 25 ruled that the allotment process for the 204 mines over the past two decades was illegal
- SBI Cap, PwC, Deloitte and CRISIL had participated in a bid to be consultant during the 2012 auction
Source:Business standard
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