CIL has been conducting its e-auctions through the two service providers since the process started in 2005
Coal India Ltd (CIL) is planning to sell 10% of its annual output in the next three years via e-auction, for which it is inviting bids from service providers.
State-owned MSTC Ltd and mjunction Ltd—jointly owned by Tata Steel and the Steel Authority of India Ltd (SAIL) — are the two existing service providers.
CIL has been conducting its e-auctions through the two service providers since the process started in 2005.
The country's near-monopoly coal miner is set to sell 235 million tonne (mt) through the process during this year that comes to a yearly average of 78 mt. It had sold 51 mt and 80 mt in fiscals 2015 and 2016, respectively.
"Considering about 10% of the estimated coal production of CIL to be sold through e-auction process during the next three years, it is estimated that about 235 million tonnes of coal and coal products shall be sold through e-auction by CIL. This is an indicative position only. The quantity to be sold through e-auction would be reviewed from time to time by Ministry of Coal," CIL said in the tender document.
CIL had dispatched coal of about 489.98 mt during 2014-15 and 534.62 mt during 2015-16. During fiscal 2015, about 60.38 mt was offered for sale through e-auction out of which about 51.16 mt got allocated.
About 125.52 mt was offered for sale through e-auction in fiscal 2016, of which about 79.80 mt got finally sold.
"Coal India Ltd desires to appoint two Service Providers. On qualification, the bidders will be awarded the work in the ratio 60:40 on the basis of events between the two qualified L-1 and L-2 Bidders in that order at L-1 rate," the bid document said.
While CIL has been thinking of raising the number of its service providers and has been open to recruiting other services providers, responses weren't encouraging.
It is likely that the coal miner would continue with these two. mjunction officials refused to comment on this as it may impact future business relations.
While initially resulting in windfall gains, profits from e-auctions for CIL have been under steady pressure.
CIL's realisation from e-auction has gone dwon, from a peak of 116% premium over notified prices in October 2014 to 28% in July 2016.
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CIL had dispatched coal of about 489.98 mt during 2014-15 and 534.62 mt during 2015-16. During fiscal 2015, about 60.38 mt was offered for sale through e-auction out of which about 51.16 mt got allocated.
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