🇮🇳India

Reverse Auction में Aggressive Bidding के कारण मार्जिन संपीड़न

1 verified sources

Definition

Contract mining tenders in India employ reverse auction models where contractors underbid to win long-term contracts. Search result [4] shows that in 2016-2018, average contract values ranged from ₹189-359 crore, but aggressive pricing compressed margins as newer players entered bidding consortiums. Rising operational costs (fuel, wages post-Labor Code 2020) were not factored into fixed-price long-term contracts, leading to losses mid-contract.

Key Findings

  • Financial Impact: ₹50-150 crore per large contract (estimated based on 2-5% margin erosion on ₹700-1,300 crore contract values cited in [4]); affects 10-15 major contractors nationally
  • Frequency: Per tender cycle (12-24 months); recurring for multi-year contracts (5-10 years typical)
  • Root Cause: Lack of real-time operational cost visibility during bidding phase; manual cost estimation; no automated indexation for spot price volatility in fuel and labor; reverse auction pressure creating race-to-bottom pricing

Why This Matters

The Pitch: Coal mining contractors in India waste ₹200-500 crore annually across major mining contracts due to margin compression from competitive bidding on incomplete cost data. Automation of real-time cost tracking (fuel indexation, labor cost updates, equipment utilization) eliminates bidding errors and protects ₹50-150 crore per annum per large contract.

Affected Stakeholders

MDO bidding teams, Finance/Costing teams, Procurement officers, Contract negotiators

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Underbidding के कारण संचालन संकट और प्रकल्प विलंब

₹100-300 crore per project in cumulative delays, rework, and contract penalties (estimated from typical coal mine production delays of 6-18 months on ₹700-1,300 crore contracts); 2-5% of total contract value

GST ITC Matching में Manual प्रक्रिया से कर जोखिम

₹5-20 crore per large operator annually; GST penalties up to 50% of tax due + interest @ 18% p.a. on disallowed ITC; TDS defaults @ 2% on contract payments add ₹1-3 crore per ₹50 crore contract

Spot vs. Long-Term मूल्य निर्धारण में दृश्यता की कमी से अनुबंध मूल्य निर्धारण त्रुटियाँ

₹50-200 crore annually (estimated 2-8% price risk on ₹2,500-4,000 crore annual coal procurement across major operators); typical contract repricing disputes settle at 5-10% variance from market price

उप-ठेकेदारी शृंखला में GST अनुपालन और सत्यापन खर्च

₹3-8 crore annually per large operator (600-1,200 FTE hours @ ₹50,000/month salary = ₹5-8 crore); typical process takes 5-10 working days per invoice batch, affecting cash flow

खनन योजना अनुमोदन में विलंब से लाइसेंस रद्द होना

Per rejection: 4-8 weeks of lost production capacity (₹2-5 crore for mid-sized mines); potential license revocation causing ₹50-200 crore stranded asset loss

अनिवार्य एस्क्रो खाता संशोधन में विफलता से खनन अनुमति वापसी

Mine opening permission withdrawal = ₹15-80 crore annual production loss; administrative rework costs ₹20-40 lakh

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