In a surprising move, Coal India Ltd (CIL) has issued a tender seeking bids from private service providers to conduct e-auctions for the sale of coal on behalf of its subsidiaries for the next two years. This comes despite the state-owned PSU transitioning to its own internal e-auction platform earlier this year, sparking uncertainty among external e-auction service providers who have traditionally managed these auctions.
The deadline for submitting bids is set for November 27. This tender has raised questions among established external service providers, such as MSTC and mjunction, which have facilitated CIL’s e-auctions for nearly two decades. These companies are now seeking clarification regarding the scope of the tender and whether it will allow them to continue playing a significant role.
CIL launched its internal e-auction platform in January 2024, developed with the help of its subsidiary CMPDI and the National Informatics Centre (NIC). Although the system underwent successful trials in 2023, there have been complaints about its performance, leading the company to consider external service providers once again.
An official from CIL confirmed that around 60 million tonnes of coal were expected to be auctioned through the platform by September 2024. The move to engage external players is seen as a strategic effort to increase flexibility and responsiveness to shifting market demands and consumer preferences.
The new arrangement is set to take effect in April 2025, after the expiration of existing contracts with current service providers in March. However, industry insiders are speculating about the long-term role of CIL’s internal platform, with some questioning whether the platform will continue to function alongside external providers or eventually phase out.
Service providers are particularly concerned about the clarity of the tender’s terms, especially regarding the volume of business expected. A senior official from one of the external companies expressed uncertainty, stating, “We’re seeking more details about the expected business. Our revenue depends on the number of auctions, and it’s unclear whether external providers will simply serve as a backup or have an assured revenue stream.”
As the industry awaits further details, the outcome of this tender could significantly reshape the future of coal auctions in India.
