KOLKATA (miningweekly.com) - India’s maiden auction of captive coal blocks hit yet another snag with prospective bidders raising a red flag over alleged discrepancies in the reserves of the three blocks on offer.

In a pre-bid meeting of prospective captive coal users earlier this month, the users claimed that reserve estimates differed in various documents provided by the government, a Coal Ministry official said.

The prospective bidders also sought clarification on whether captive coal block users could put in bids as a consortium and whether there were any limits to the number of companies participating in the consortium, since the bid documents were not clear on the issue, the official said.

The inter-Ministerial group monitoring the auction was scheduled to hold a meeting on Thursday to decide whether the bidders could be allowed to sample coal from blocks in the region and to conduct independent yield analysis to corroborate reserve estimates provided by the government.

Clarifications have also been sought on whether the end use plan for the captive coal block should be constant through the life of the reserves or if the end use could change in the interim, since the bid documents did not lay down the specifics with bidders clearly seeking flexibility of end use through life of the block.

However, it was conceded that the inter-Ministerial group would be hamstrung in taking speedy decisions considering that the Indian national elections were currently under way.

It was also pointed out that coal block allocation, through the preferential dispensation, had put the present government on the mat. Worse, a book released last week by a former bureaucrat and secretary to the Coal Ministry, alleged complicit and implicit involvement of Prime Minister Manmohan Singh in the preferential allocation of coal blocks.

In a 2012 report, national auditors the Comptroller and Auditor General alleged that the present Congress party-led government had under-priced coal blocks, costing the national exchequer $33-billion, by not adopting the auction route in allocating the coal blocks, which was presently one of the major political issues of the national elections.

In February, the government initiated the auction process by putting three coal blocks up for auction with total estimated reserves of 500-million tonnes, for captive use by steel, cement and sponge iron companies. Around 40 companies from these user industries had picked up bid documents for participation in the auctions.

According to information provided by the government, the coal blocks of Jhirki, Jhirki (West) and part of the East Bokaro coalfields had estimated reserves of 268-million tonnes, the Tokisud block, part of South Karanpura coalfields, had 128-million tonnes and Andal, part of Raniganj coalfields, had reserves of 104-million tonnes.