FAIR AND TRANSPERENT E-COMMERCE
MSTC has played a key role in the last coal e-auction. Kindly share the details of the experience.
The Supreme Court of India had cancelled the allocation of 204 coal mines in September 2014 and set a deadline for the Government of India to ensure that the operating coal mines are re-allocated through e auction by 31st March 2015 so that coal production from those mines is not hampered. Given the enormity of the work, it was a task for the Ministry of Coal especially because there was no precedence of e-auction of coal mines or for that matter any mine in the country. The whole process had to conceptualized, documented and got approved. MSTC approached the
Ministry of Coal with the offer to provide its e-auction services. After a thorough due diligence, Ministry of Coal appointed MSTC as the e-auction service provider for the 204 coal mines. The decision was greatly influenced by the fact that MSTC had the experience to handle critical, sensitive and time bound assignments. It was engaged by the Hon’ble Supreme Court as the service provider for e-auction of iron ore in Karnataka in 2011. Moreover, MSTC does not have any conflict of interest in the e-auction process and hence can act as a neutral third party service provider ensuring that every bidder is treated equally. This is very important for an e-auction service provider to prove its neutrality and fairness. The e-auction process in itself has been a learning experience for our team. Our team had worked intandem with the officials of the Nodal Authority and Transaction Advisor.
MSTC has been handling e-auction of Coal India Ltd. But the volume of e auction is falling in the recent past. What is your observation on that?
MSTC is the first company to have conducted e-auction for sale of coal for Coal India Limited way back in 2004. Since then, MSTC is conducting e auctions for sale of coal on behalf of Coal India Ltd and its subsidiary companies. The volume of sale depends on the quantity of coal offered by Coal India Ltd on year to year basis. The volume of sale of coal through e auctions handled by MSTC in last two years i.e 2013-14 and 2014-15 have been Rs 5618 Crore and Rs 6055 Crore respectively. In the current fiscal (201516) first four months, the volume of sale of coal for Coal India is approximately Rs 2500 Crore which makes us to believe that the total sale for 2015-16 can be in the range of Rs 7500 Crore. Thus, the volume of e-auction for Coal India Ltd handled by MSTC is in the upswing. The sale of coal through e-auction takes care of the demands of small and non-power sector consumers and at the same time it gives Coal India good revenues in a transparent way.
How have you ensured the transparency of the whole process?
MSTC doesn’t outsource any part of its activity to any outside agency or person and accomplishes all its assignments
through its full time employees who sign Non Disclosure Agreement with the company. This ensures that governmental functions are carried out by government officers and the sanctity of information is fully secured. MSTC’S processes are in full compliance to government rules, regulations and guidelines and are subject to audit by CVC, CAG and Parliamentary Committees. Transparency of operation is given topmost priority in MSTC and the checks and balances in the system are designed to ensure the same. Sale and purchase decisions in the government were taken by the own officers without engaging any outside private agencies. Being a sovereign function of the government, it must be discharged either by the government themselves or by its own agencies like NIC & MSTC.
Which are the other organizations you are holding auctions apart from the coal ministry?
MSTC has been rendering its e-auction services to almost all the major PSUS in the country. Governments of Andhra Pradesh, Kerala, Delhi, Ministry of Defence, Finance, Home Affairs, Cabinet Secretariat, PMO, Niti Ayog etc are other major clients of MSTC. Following the coal mine e-auction process, Ministry of Power has engaged MSTC as the e-bid management agency for allocation of PSDF to stranded gas based power plants in the country.
What are your areas of priority apart from auctions?
MSTC also provides e-tendering solutions and e-reverse auction services for meeting procurement needs of government clients. MSTC has also conducted global e-tender-cum-eauction for sale of barite ore and red sander wood where foreign bidders have participated. Apart from e-commerce services, MSTC has a long history of importing bulk industrial raw materials on back to back arrangement mostly for steel industry. Besides, MSTC is now a renowned supplier of imported thermal coal to power producing companies like APGENCO, MAHAGENCO, RRVUNL, HPGCL, TANGEDCO etc. In e-commerce, MSTC is one of the largest e-commerce service providers. It provides seamless service from designing the model architecture to programming and final roll out of e-auction platforms by its own employees without any outsourcing.
What is the overall performance of MSTC in terms of turnover and profit?
MSTC being an e-commerce company is small in size in terms of man power. The company has about 315 employees on the role for all its offices located in all state capitals and trade points. The company has made operating profit every year since its inception in 1964 and has paid dividend to Government of India regularly. During 2014-15, the turnover of the company was Rs 5506 crore and is reporting a PBT of about Rs 131 crore. The volume of business performed on our portal was more than Rs 29000 crore in 2014-15.
What are the future plans for MSTC?
MSTC aims to maintain its positive growth in terms of volume of business. MSTC doesn’t aim to have a policy of making large profits. Its objective is to emerge as the government’s trusted arm of e-commerce activities not limited to only e-auction. MSTC’S strength lies in its ability to convert any physical commercial activity to online activity. Hence, MSTC is looking forward to more assignments from the government which will align with the Digital India programme of Government of India. MSTC also has plans to set up auto shredding plants in the country for environment friendly recycling of scrap which will preserve the virgin resources and lower costs for consumers. MSTC has also plans to open up trade offices in Singapore, Europe and UAE, for providing e-commerce services where there are huge possibilities due to our lower costs of operations and thus turn MSTC into a full fledged MNC in government sector.
MSTC has endeavored to organize and expand markets for the various commodities handled by it making the transactions as transparent as possible through extensive use of e-commerce – from e-auction of forest and agricultural produce to e-auction of iron ore and other minerals etc. The volume of business, profits as well as net worth of the company has almost doubled in past years. It has therefore, emerged as a diversified e-commerce trading house with particular emphasis on bulk raw materials from steel to coal industry sourced both indigenously and internationally. Towards this end MSTC builds up tie-ups with international trading houses, develop warehousing system and logistics. Planning and organizing the disposal of scrap and secondary arisings, unserviceable stores, etc. of organisations, both in the public sector and private sector continues to be a main stay of e-auction. Customers’ satisfaction is ensured by providing prompt and efficient dealing with customers, principals and other business associates. MSTC develops and maintains a competent, dedicated and motivated workforce. MSTC therefore, promotes joint ventures with selected domain experts in the area of mining, logistics, warehousing, and value addition to the merchandise. In conversation with S K Tripathi, Chairman-cum-managing Director, he shares the digitalized future of MSTC Limited with Puja Banerjee
“MSTC has made rapid stride in the e-commerce sector in line with the new Government Policy for promoting
e-govemance in all sectors of economy. As a result of this, MSTC could not only expand its volume of business in the existing areas but also expand into diverse areas like iron ore, chrome ore, timber, power, thermal coal etc. to benefit the population and the Government
exchequer as well by fair and transparent e-auction processes.”
— S K TRIPATHI Chairman-cum-managing Director, MSTC Ltd.