Coal e-auction back after court tussle
Online auction of the commodity which changed the face of the business in Bihar and Jharkhand, is back on the rails after a round of court and bureaucratic tussles, reports Samiran Saha.business Updated: Dec 07, 2007 22:50 IST
It takes technology and Supreme Court judges to eliminate what some call the coal mafia.
Online auction of the commodity which changed the face of the business in Bihar and Jharkhand, is back on the rails after a round of court and bureaucratic tussles. For decades, middlemen would buy coal cheap under a fixed-price regime and corner black market premia under a quota system where permits were given on a first-come, first-served basis in sectors other than those in critical infrastructure industries like power, steel and cement.
Core sector industries get 90 per cent of Coal India’s output under fixed-price linkages, but others like brick-makers, were left on the remaining 10 per cent.
Things changed in 2004 when e-auctions began but that was suspended in November 2006 after middlemen moved the SC, saying their livelihoods were threatened. But the country’s highest court struck them down, reviving the e-auction again on November 26 this year.
Since then Coal India Ltd has been able to sell two million tonnes, getting on its own books a 111 per cent premium over the base price of Rs. 800 per tonne. This is the premium earlier cornered by middlemen.
Between March 2005 and November 2006, CIL allocated almost 39 million tonnes of coal and over 47,000 participants bid in the e-marketing initiative.
The additional revenue gain to CIL arising from difference between bid price and notified price of allocated quantity was to the tune of Rs.1,500 crore.