AUCTION of COAL MINES for SALE of COAL Queries & Responses to Standard Tender Document Dated June 18, 2020 Part – IV No
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AUCTION OF COAL MINES FOR SALE OF COAL (11th TRANCHE OF AUCTION UNDER THE COAL MINES (SPECIAL PROVISIONS) ACT, 2015) (1st TRANCHE OF AUCTION UNDER THE MINES AND MINERAL (DEVELOPMENT AND REGULATIONS) ACT, 1957) Queries & Responses to Standard Tender Document dated June 18, 2020 Part – IV Nominated Authority Ministry of Coal Government of India New Delhi September 21, 2020 Auction of Coal Mines for Sale of Coal – Queries & Responses A. Queries and Responses to Standard Tender Document dated June 18, 2020 The following clarifications are applicable to the Standard Tender Document dated 18 June, 2020 as well as to i) mine-specific Tender Documents dated 18 June, 2020, under 11th Tranche of auction under the CMSP Act & 1st Tranche of auction under the MMDR Act and ii) mine-specific Tender Documents dated 01 September, 2020, under 1st Tranche of auction under the MMDR Act. S. No. Query Response 1. Tender Document Clause 1.1.37 Mining Lease As per Applicable Law. Bidders are The execution of mining lease can run into hundreds of Crores and the calculation methodology varies across state requested to assess the mining lease governments. Exact calculation of mining lease is essential for bidders to make informed decisions. expenses as per methodology of State It is requested that exact calculation of mining lease expense be provided for all the coal blocks offered for auction. This Governments. would provide clarity to the bidders on the expected capex for executing mining lease 2. Tender Document Clause 3.2 Tender Document Notice dated September 8, 2020 may A. If we buy a tender document for a coal block and the coal blocks gets removed from the list subsequently. How will be kindly be referred to in this regard. get the refund. If the coal block is removed from the list by MoC, The tender document amount to be refunded to the bidder. B. As per newspaper report, the following Blocks are being withdrawn from the list of 41 Blocks which were discussed at the pre-bid conference. · Madanpur (N) in Chhattisgarh · Morga (S) in Chhattisgarh · Morga II in Chhattisgarh · Sayang in Chhattisgarh · Fatehpur East Whether Bid security amount would be refunded for the above blocks if Bidder has purchased the tender documents. 3. Tender Document Clause 3.3.2 (b) Ranking and Qualification As per Clause 3.3.2(b) of the Tender It is therefore suggested that the single technically qualified bidder in the IPO round should also be considered as Document. Qualified bidder and the Auction process for that coal block should not be annulled. A coal block may not be lucrative to other bidders due to location, logistics, commercial angle and other factors and there could be only one bidder interested to bid for the block due to its vicinity to his plant and commercial sense. Considering single bidder will help in developing such coal blocks and help in augmenting country’s output. This will also lessen the burden on CIL. Page 2 of 73 Auction of Coal Mines for Sale of Coal – Queries & Responses S. No. Query Response 4. Tender Document Clause 3.3.2 (h)(ii) Fixed Amount Fixed Amount shall be payable as per A. The fixed amount payable to the prior allottee for surface infrastructure, statutory clearances and land is substantial. Clause 3.3.2 (h)(ii) of the Tender However, it poses a significant risk to the Successful Bidder in the event such infrastructure or land or approvals are not Document. The Fixed Amount for each in place. Hence, we request you to provide for such eventuality and compensate (refund) the Successful Bidder. Coal Mine has been provided in the Mine Dossier for respective Coal Mine. B. Does the Successful bidder have to pay NPV again wherever the forest land is already acquired and compensation paid It has also been uploaded in the by the prior allottee. Notifications Tab of MSTC Portal. C. Fixed Cost: Asset wise values required with a clarification whether the given values are depreciated amount or not. In case the values are not depreciated value, then the same shall also be provided. Both for land and Infrastructure costs, in some cases 2 values are given, claimed by prior allottee and as per CMSP Act, which amount will have to be paid by the new allottee? D. Fixed cost pertaining to value of land and mine infrastructure has been disclosed under the following categories: i) Claims submitted by Prior allottee ii) Value as per CMSP Act and High Court judgement Please clarify as to which amount would be payable by the successful Bidder. Will it be only the amount disclosed under point (ii) above or the cumulative amounts disclosed under point (i) and (ii) above? iii) Is the fixed amount payable if the prior allottee has not submitted any claim? 5. Tender Document Clause 3.6 Site Visits and Information Site visits are being conducted through A. As per the schedule, it is expected that the Technical Round for the Auction of Coal Blocks for sale of coal will take Coal Controllers Organisation. Details place on 18.08.2020. Our members are preparing themselves to submit their bids as per the stipulated timelines. of contact person from the Regional However, the schedule for Mine visit is yet to be declared. As per our conversation with the concerned officer at the office of CCO who would be regional office of CCO for respective mines, due to the threat of COVID’19 pandemic and difference in guidelines and conducting site visits for prospective rules of various state governments, the former are facing difficulties in conducting the mine visit. In absence of physical bidders have been uploaded on the inspection of the mine/block, it will be difficult to undertake technical due diligence & do justice to the process. Hence, it website of MSTC. is requested that a decision regarding the conduction of mine visit is taken at the earliest. B. Site visit plan for the 3 newly added coal blocks may be provided. Also given the paucity of time left till 29th Sept 2020, is it possible that site visit for the newly added coal blocks would be possible within the timeline? Page 3 of 73 Auction of Coal Mines for Sale of Coal – Queries & Responses S. No. Query Response C. Where a JV company is applying for a block, number of visitors allowed for site visit should be on the basis of each JV partner 6. Tender Document Clause 3.7 Tender Document Queries and Clarifications The responses to the queries Part II & We have checked the website of serviceprovider MSTC. Since yesterday, the site is flashing a message that Response to III have been uploaded under queries Part II & II has been uploaded at Response to Queries section. But the same has not yet been done. Response to Queries tab on the MSTC portal. 7. Tender Document Clause 3.8 Schedule of the Tender Process The schedule of the auction process A. We request the Coal Ministry and Government of India and of the States to notdelay the auction schedule any further has been uploaded on the MSTC and conduct them as per the amended schedule only. Platform. B. The coronavirus pandemic has restricted the movement of men and material. Due to this restriction, proper due diligence of the blocks is yet to be completed. A proper physical site inspection along with due diligence of the offered blocks are essential for devising a proper bid strategy. Keeping in view of the above, request you to kindly consider extending the bid submission date along with other important deadlines like mine site visits and bid clarification (written queries) deadline by at least 4-6 weeks from the deadlines as per the tender document. 8. Tender Document Clause 3.9 Value of Estimated Geological Reserves and Clause 6 Bid Security Upfront Amount shall be payable as The ratio of Mineable reserves viz-a-viz Geological Reserves in case of OC mines is very different from UG mines. In case per Clause 3.9 of the Tender Document of OC mines, Mineable reserves are about 80% of Geological Reserves, whereas in case of UG mines, it is an opposite and Bid Security shall be submitted in situation and Mineable Reserves are 20% of Geological Reserves. However, the Upfront Amount and Bid Security is based accordance with Clause 6 of the on Geological Reserves for both OC and UG mines. MoEFCC whilst calculating NPV towards forest compensation also Tender Document. charges 50% NPV in case of UG mines as compared to OC mines. Therefore, a proposition may evolve wherein Upfront Amount and Bid Security in case of UG mines is different from OC mines. Since, Mineable Reserves are significantly smaller in UG mines than OC mines, the participants for these mines are smaller players and hefty Upfront Amount and Bid Security may be detrimental to larger participation in UG mines. 9. Tender Document Clause 3.9 Value of Estimated Geological Reserves and Upfront Amount The Upfront Amount shall be payable A. In case of blocks like Chendipada, a fully explored block has been clubbed with Chendipada – I, which is partially in accordance with Clause 3.9 of the explored. Thus is leading to an anomaly where bidder is supposed to pay upfront amount based on resources which have Tender Document. Page 4 of 73 Auction of Coal Mines for Sale of Coal – Queries & Responses S. No. Query Response not yet been fully established through the exploration process. For partially explored blocks, the upfront payment should be based on Geological Reserves ascertained after exploration is completed.