Kerala timber, sandalwood e-auction ups revenue

Thiruvananthapuram: Kerala Forest Department has been conducting physical auctions at 35 government timber depots under six timber sales divisional forest offices in the state. As a part of increasing the transparency and adding more credibility to the auction process, KFD has stopped the traditional auction method and has embraced the e-auctions through MSTC Limited.

The agreement between MSTC and KFD was signed on 30th September 2014 and the e-auctions were hosted from 19th November 2014. The e-auctions for the six Timber Sales Divisions started on 19th November 2014. A special registration for Rs 500 with a limit of 5 CUM (8 CUM with effect from 1st August 2015) of timber for individuals was suggested by KFD and the same had been implemented by MSTC. This helps the individuals who are constructing their own house to purchase timber directly from KFD through e-auction, without worrying about the higher rates in the open market.

Over 1000 individuals have registered with MSTC and have successfully participated and purchased timber for the construction of their own house. In addition to the success of timber e-auction, Sandalwood sold by Marayoor Sandal Division, Kerala Forest Department was also auctioned through MSTC.

Buyers from all over the country successfully participated in the e-auction. An increment of over 50 per cent on the starting price was witnessed along with a record rate (Rs 14,710 per kg) in the history of Sandal auctions.  In addition to the material value, Government also had benefits in the terms of VAT, FDT, TCS etc which sums up to about 23 per cent of the material value for all the auctions conducted by KFD.

A sale value of Rs 44.66 crores was obtained through Sandal auctions in 2015-16 which observed pan India participation thereby ensuring maximum rates and revenue to Kerala.

A sale value of Rs 35 crores was obtained for the Timber e-auctions conducted from 19th November 2014 to 31st March 2015. In 2015-16 the total sale value for Timber auctions was Rs 167 crores which provided over Rs 38 crores as various taxes to the government.

With the introduction of e-auctions, KFD has successfully eliminated the cartel formation within the buyers, thereby ensuring the maximum sale value. E-auction has provided the liberty to bid online for the individual buyers at the comfort of their home, office or even during travel without facing any competition or resistance from the timber merchants.

Further to the success of timber and Sandal e-auctions, Kerala government has entrusted MSTC for the disposal of vehicles, scrap and other materials from all departments of Kerala government, all over the state through e-auctions.

The auctions for the same have been successfully started from July 1st last year. So far over Rs 2 crores have been obtained as sale value through the disposal of scrap, vehicles, e-waste etc for various departments of the government.

MSTC has thereby played the crucial role in facilitating e-Sale in the state of Kerala for various government departments.

      MSTC Ltd has signed a Memorandum of Understanding (MoU) with Mahindra Intertrade for a joint initiative to set up India's first auto shredding facility. The proposed facility will be equipped with state-of-art, fully automated end-of-life vehicle recycling equipment and will be India's first such facility. This is expected to facilitate recycling of scrapped automobiles .

      Speaking on the occasion, S K Tripathi, Chairman & managing Director, MSTC Ltd, said, " MSTC is always looking at innovative ways to recycle scrap and protect the enviromnent and this facility will help to participate in the emission targets which India has promised to fulfill via the COP 21 Emission Treaty."

"Outlook" weekly magazine, May 16, 2016 edition.

Mahindra Intratrade has signed a MoU with MSTC Ltd for a joint initiative to set up India's first auto shredding facility. The proposed facility will be equipped with state-of-the-art, fully automated end-of-life vehicle recycling equipment and will be India's first such facility. This is expected to facilitate recycling of scrapped automobiles. Speaking on the occasion, Chairman & Managing Director, MSTC LTd, S K Tripathi, said, "MSTC is always looking at innovative ways to recycle scrap and protect the environment and this facility will help to participate in the emission targets which India has promised to fulfill via the COP 21 Emission Treaty." So far, auto-shredding in India has been largely an unorganized activity with vehicles long past their usable life still in use, especially in rural and semi-urban India. " The concept of vehicle scrappage is still new to India as compared to the West where it is a lucrative industry. Recycling, if done correctly, is not only environment friendly but will also help keep older vehicles off the streets." said Zhooben Bhiwandiwala, Managing Partner, Mahindra Partners.

The pioneer, New Delhi, Friday, May 6, 2016

Sell iron ore through online marketplace: SC-appointed panel EXIT E-AUCTION online platform to enable long-term deals, chek under-pricing boost revenues via royalty fees and taxes

A Supreme Court-appointed panel has recommended replacing the current e-auction of iron ore mining in Karnataka with an alternative system to enable mineral producers and steel companies to sign long-term supply contracts, improve margins, check under-pricing and raise state government revenues.

The Centrally Empowered Committee (CEC), which is currently overseeing the mineral’s auction in the southern state, has told the SC that the present system of e-auction be replaced by a state government-monitored system.

In its September 2, 2011 order, the Supreme Court had appointed a CEC to oversee the e-auction of iron ore from Karnataka. The committee had, in turn, formed a monitoring committee to carry out the orders.

In a report submitted to the Supreme Court last month, the CEC has proposed that the new system will work on the lines of an online marketplace allowing iron ore producers and end-users such as steel companies to ink long-term deals in a government-monitored transparent structure.

Such a system will also rule out under-pricing by the iron ore producers that can potentially distort the market.

The CEC report comes after the Federation of Indian Mineral Industries (FIMI), a mining industry body, moved the Supreme Court seeking a halt on e-auction for sale of iron ores in Karnataka. The court had asked CEC to reply to FIMI’s plea.

The court had ordered e-auctions of the mineral monitored and overseen by the CEC amid widespread allegation of illegal mining and depletion of forest reserves in the state.

Small and local private miners, however, have alleged that the e-auction mechanism in Karnataka was restrictive with one dominant supplier –state-owned NMDC--limiting free and fair price discovery.

A petition filed in the Karnataka High Court by Samaj Parivarthana Samudaya has alleged that the base price set by NMDC in Karnataka e-auctions are at a substantial discount to the international iron ore prices.

For instance, it said that NMDC’s landed ore has averaged over Rs 2,000 per tonne. The local mining industry is of the view that the artificially low prices set by NMDC is hurting smaller mining players in the state, leading to pile up of inventory.

NMDC said that the price discovery system under the e-auction route is transparent.

“Pricing of iron ore, either by NMDC or small miners, is set by the companies themselves based on market dynamics. NMDC, being the only PSU in merchant mining, follows a transparent pricing system, and prices are set on a monthly basis. In Karnataka, all miners are free to set their floor prices of iron ore,” NMDC told HT in an emailed response.

The new method that CEC has proposed will provide for “system of online checks and balances to ensure that sale and purchase has not taken place substantially below the market value,” the CEC report of April 28, which HT has reviewed, said.

Under the proposed system, the buyer-seller agreements will be recorded online. Sellers will have to disclose the minimum acceptable price and product details including moisture and alumina content in iron ore. Bids offered by buyers will be put up on a real-time basis. 

The Hindustan Times, New Delhi, 9th May, 2016, Monday.

Sanmarg, Kolkata , 9th May, 2016, Monday