'Auctioneer should get minimum fee in case auction fails'
New Delhi: A prospective auctioneer for the telecom spectrum auction today demanded that the government pay a minimum fee in case of a failure of the auction.
"Please fix a minimum fee for the auctioneer in case the auction fails due to any reason," one of the prospective auctioneers, agency that will operate auction process, said at pre-bid conference held Tuesday.
The Request For Proposal (RFP) floated by Department of Telecommunications (DoT) has made a provision to pay maximum of Rs 10 lakh in case the auction fails only if the outcome of auction is not accepted by government.
The prospective auctioneer clarified that there may be a case where no company participates in bidding for spectrum due to high spectrum price or non-acceptance of final conditions proposed by the government.
"In these kind of cases, we would like that government should pay an amount that can help auctioneer recover cost of expenses made for setting up the auction process," the participant said.
There were representative from around 8 firms present in the conference including SBI Capital, TCIL, e-Procurement Technologies, Uninor and others. There was no representation from N M Rothschild, the firm which operated 3G and BWA spectrum auction in 2010.
Participants also asked the inter-ministerial committee (IMC) to make available the decision of government with respect to spectrum refarming, decision on charging of spectrum with existing players as proposed by DoT.
IMC members questioned the grounds for these queries, to which a participant responded that these are factors which are going to affect final remuneration of the auctioneer.
"Clarity on these issues will help us in understanding the interest of companies in the bidding for spectrum. With high number of bidders, chances are that final price of spectrum can be high and pay-out for auctioneer will be high," participants said.
As per RFP, the auctioneer will be paid as a percentage of the difference between the winning bid and the reserve price. The participant said based on information they will be able to assess the percentage they can quote in their bid.
The IMC, chaired by Joint Secretary at Department of Commerce JS Deepak, took note of the point and said that the committee will discuss and inform companies about the final decision of the government.
There also were issues raised on providing legal indemnity to auctioneer in case participants in spectrum auction file suit against them. On this, Deepak clarified that for bidders in auction process, the agency operating the process is only like a consultant to DoT.
He added that the agency selected for operating process will not be exposed to any legal action by bidders.
Advisor (Finance) DoT Sadhana Dikshit said that department expects to post all details related to spectrum auction, including spectrum price, by June 28 or latest by June 30.
"The auctioneer will get at around 6 days time to prepare for their bid," Dikshit said.
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