Goa's first mining e-auction next week

PRAKASH KAMAT/THE HINDU, PANAJI | 11 February 2014 20:16 IST

The Goa government will hold its first e-auction of ore on February 17, the Directorate of Mines and Geology (DMG), Goa said.

The last date to qualify for e-action upon the payment of earnest money deposit (EMD) is Wednesday.

The e-auction is for the determination of price on MSTC platform and shall effectively culminate into sale on its acceptance by the Goa government.

The Department has specified and uploaded the details of the first e-auction on its website. It said the base price for e-auction shall be fixed on or before February 16 and shall be communicated to MSTC.

It shall be visible to registered dealers at the commencement of each auction. The inspection and sampling will take place from last Friday last to the coming Friday.

The DMG is currently busy countering some of the doubts raised ostensibly by some unnamed disgruntled ore traders who have raised questions over the e-auction process arguing that e-auction does not reveal the highest price bid, so transparency is at stake unless the software is modified.

They say that if the objective was to discover the best price for the ore, the e-auctioning process should have permitted even overseas buyers to participate.

They wondered if it had been tailored to permit a few big sharks to participate and share profit. The terms of the e-auction had been targeted against the participation of local consumers, they said.

A senior official of the DMG told The Hindu on Monday that the lower price bid shall not be shown to bidders and the base price and highest bid would be seen.

That decision was taken to generate more revenue and issue was even discussed with MSTC and the government and it was decided that if need was felt the same may be included subsequently.

The earlier clause, which the Goa official said was there in Karnataka e-actions, was found to be in the interest of buyers and not sellers and hence it was removed.

Now they would have to guess what would be the lower bid above base price or else has to bid higher than the highest bid.

DGM officials said that foreign buyers could participate provided they had the necessary clearance from RBI for investment and participation, etc., and for this reason, registration under rule 45 of MCDR 1988 has been relaxed for participation in auction, though such registration would be required at a later stage for successful bidders.

He said exact details of requirement for foreign bidders had been obtained and the same shall be shortly uploaded by the DMG on its website.

Another objection being raised by some sections of the bidders taking recourse to local media was that royalty was chargeable on all stocks sold through e-auction. However, there were stocks for which royalty had been paid. So, it would be a double payment issue for the same quantity.

The DMG dismissed the argument saying charging of royalty was entirely as per the guidelines of the Supreme Court under whose( monitoring committee’s) supervision the e-auction of ore was taking place.

On the issue of decision to keep the EMD high, the official said it was because of the past experience of fly-by-night-operator traders responsible for mining mess in Goa.

Around 461 traders were registered by depositing just Rs. 1,000 with the DMG. That apart the objective of auction was price maximisation.

A section of prospective bidders wonders as to why the government was not putting up for e-auction in the first lot, the approximate four million tonnes of ore that was determined to be clearly illegal instead of going in for ore lying on Jetties.

Jetty conditions may or may not be suitable for loading ore as no maintenance work had been undertaken in the last 18 months.

Also, jetty charges have not been quantified by the e-auction monitoring committee and jetty owners may not agree on this factor.

On the issue of first selection of lot, the DMG said it was as per wisdom of government. The same was done based upon valuable inputs of monitoring committee of first clearing logistics such as ports and jetties.

The credibility of auction would depend upon the near to accuracy of quantity and quality as such the selection was also done with this view. As for the allocation of e-action proceeds, it would be as per the decision of the Supreme Court.


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