Response to the Queries for Allotment of Coal Mines to ... · PDF fileResponse to the Queries...

Response to the Queries for Allotment of Coal Mines to Government Companies

S. No. Query Response 1 Clause 3.2.2

“the applicant shall have incurred an expenditure of not less than thirty per cent (30%) of the total project cost of the unit or phase of the Specified End Use Plant(s) for which a coal linkage has not been granted”. Clause 3.2.3 “However, an applicant having coal linkage shall also be considered for allotment for their existing specified end use plant(s), if such applicant commits to surrender their existing coal linkages for the same. The existing coal linkage shall then be tapered off as per extant policy”. Can application be filed for additional coal requirement of existing plant/unit, which is in operation and existing coal linkage is less as compared to the coal requirement of the plant/unit, without surrendering existing coal linkage?

As per the Allotment Document. Application can be submitted for coal requirement of existing plant/unit, which is in operation and has coal linkage, if such Applicant commits to surrender their existing coal linkages for the same. The existing coal linkage shall then be tapered off as per extant policy.

2 Clause No. 3.2-Eligibility requirement for Applicant UPRVUNL is running thermal power projects to the tune of 5933MW in the State of UP. The Coal requirement from these projects as per norms of 5MTPA works out to 30MTPA against which coal linkage available as per FSA is only 25MTPA meaning a shortfall of 5.00MTPA. In case the requirement @150% of coal is accounted for, then the reserve required for the shortfall in the next 30 years the same shall be around 215MT. Can UPRVUNL apply for a Coal Block for fulfilling this shortfall which shall facilitate UP, an energy starved & land locked state to avoid additional burden on import of coal.

Coal requirement @150% has not been stipulated in the Allotment Document. As per Clause 3.2.2 and Clause 3.2.3 of the Allotment Document, the Applicant shall have incurred an expenditure of not less than 30% of the total project cost of the unit or phase of the Specified EUP(s) for which a coal linkage has not been granted. However, an Applicant having coal linkage shall also be considered for Allotment for their existing Specified EUP(s), if such Applicant commits to surrender their existing coal linkages for the same. The existing coal linkage shall then be tapered off as per extant policy.

S. No. Query Response 3 Clause No. 3.2-Eligibility requirement for Applicant

Chendipada and Chendipada-II Coal Block situated in Distt Angul, Odisha was allotted in 2007 jointly to U.P Rajya Vidyut Utpadan Nigam Ltd, Chattishgarh Mineral Devlopment Corp. Ltd. and Maharashtra Power Generation Corp. Ltd. for the End Use projects as specified In the allotment letter itself. The three mentioned State utilites formed a Joint Venture Company by the name of UCM Coal Company Ltd. for mining of the said Coal Block. Now will the present dispensation whether UCM Coal Company Ltd. is eligible to take part In the allotment process. The fact remains that UCM Coal Company Ltd does not have any end use project of its own.

As per the Eligibility Conditions specifed in Clause 3.2.2 of the Allotment Document, the Applicant shall have incurred an expenditure of not less than thirty per cent (30%) of the total project cost of the unit or phase of the Specified End Use Plant(s) for which a coal linkage has not been granted. However, in cases where Applicant is a JV of two or more Government Companies, any JV partner shall meet the the above criteria.

4 Clause No. 3.2-Eligibility requirement for Applicant 3.2.2. "The Applicant shall have incurred an expenditure of not less than thirty percent (30%) of the total project cost of the unit or phase of the Specified End Use Plant(s) for which a coal linkage has not been granted." 1. Jawaharpur 2X660 MW, Obra 'c" 2X660 MW and Harduaganj 1X660 MW were planned to come up in the State Sector in U.P. in the 12th Plan. The Project environment clearances were not granted by the MOEF due to non availiblity of 1st Stage Forest clearance In line with the circulater dated 19-04-2012 of MOEF. Because of non clearance of EC for the project no major investments could be made in the said projects. However land, water, DPR, PPA, Financial Closure and other related clearances are available for all three projects. Now In the present dispensation whether the State Sector PSU can apply for the above End Use Projects. Since in the proposed Jawaharpur 2X660 MW, Obra 'c" 2X660 MW and Harduaganj 1X660 MW project land, water, DPR, PPA, Financial Closure and other related clearances are available they should be allowed to participate in the allotment process. In those cases where the land, water, DPR, PPA, Financial Closure and other related clearances are available for the End Use Projects they should be

As per Clause 3.2.2 of the Allotment Document.

S. No. Query Response allowed to participate in the allotment process for which necessary provision may be made In the Eligibility condition. 2. In case if expenditure incurred is less than 30% of the Total Project Cost of the units, is it possible to waiver the 30% expenditure clause. Suggested Text: The applicant shall have taken advance action for construction of power plant including land acquisition and for which coal linkage has not been granted. NLC, a Navratna Company under Ministry of Coal has proposed to set up 3*660 MW STPP at Sirkali, Tamilnadu with an estimated cost of Rs. 14900 cr in Phase-I. The PPA has been signed with Govt of TN. The land acquisition activities have been started. The Jilga-Barpali coal block was allotted in the past but the block is geologically disturbed and deep seated and may not meet coal requirement. The MoC has been informed about the same. Therefore, a separate block may be allotted keeping the another 1980 MW expansion/ Phase-II program.

S. No. Query Response 5 Clause No. 3.2-Eligibility requirement for Applicant

3.2.3. "However, an Applicant having coal linkage shall also be considered for Allotment for their existing specified End Use Plant(s), if such Applicant commits to surrender their existing coal linkages for the same. The existing coal linkage shall then be tapered off as per extant policy." 8.2.4- "An applicant having coal linkage for the specified End Use Plant shall surrender such coal linkage without any reservation or condition before execution of the Allotment Order In case the Applicant is declared as Allottee." In the case of State of U.P. the Coal Block allotted shall be situated in another State. In such a case the development of the Coal Block is dependent on external factors. In such a situation if the current linkage is converted into tapering linkage and the coal block development exceeds the time limit as mentioned in Allotment letter then the tapering linkage should continue for the exisiting project till the production starts in the coal block. State of U.P. is not a coal bearing State. Thus any coal block allotted, the same would be from out side U.P, therefore the suggestion for amendment has been given.

As per Allotment Document. The existing coal linkage shall be tapered off as per extant policy.

S. No. Query Response 6 3.5.1(g)- "Only 1 (one) application has been made for the Coal Mine with

reference to a particular Specified End Use Plant" and 4.1.1- "No Applicant shall submit more than I (one) application for the Coal Mine, either directly or indirectly. However, the Applicant can apply for more than one coal mine for same Specified End Use Plant." 1. Both the provisions are contradictory in themselves. Appropriate clarification may be incorporated in the document. The contradiction may be removed. 2. Whether Bid can be made for more than one Coal Blocks for one End Use Projects. If yes accordingly necessary provision be made in the documents. Because Clause 3.5.1 (g) those not allow but Clause 4.1.1. allows the same and the same has been clarified in Schedule-II General Information format also. 3. In case of Bid for Block with larger reserves which may cater to more then one End Use Project is made, whether the same would be responsive or not. Such Bid should be made responsive. Accordingly necessary provisions be made. In the list of Coal Block to be allotted there are such blocks which can cater to more than one End Use Projects.

1-2. An Applicant can submit only one Application for a particular Coal Mine with reference to a particular Specified EUP. However, such Applicant is allowed to submit separate Applications with respect to above Specified End Use Plant for coal mines other than one for which an application has already been submitted. In other words, an Applicant can submit only one Application for one Coal Mine with respect to one Specified End Use Plant. Thus, an Applicant can submit another Application for the same coal mine for a different EUP. 3. Yes, the Application shall be considered as responsive.

S. No. Query Response 7 6. 1.(a) - Requirement of coal for power generation capacity coming up in the

State till the year 2017. 1. It is proposed that End Use Projects coming up in the 13th Five Year plan should be included. Accordingly provisions be made. 2. Deficit Power States should be gIven preference/priority in the evalution criteria. 3. State Power Projects which were earlier linked to a Coal Block which now stands cancelled should be allotted Coal Blocks on priority basis. The Projects envisaged in the State of U.P. are expected to come up in the 13th five year plan. Accordingly the amendment has been proposed, otherwise no upcommg project of State of U.P. would qualify for allotment despite the fact that the State of U.P. is a energy starved State and is making all out efforts for setting up new power projects III the state. Jawaharpur 2X660 MW, Obra 'C" 2X660 MW and Harduaganj 1X660 MW were earlier linked to Chendipada Coal Block Distt Angul Odisha which now stands cancelled. Thus, Coal Block for these projects should be allotted on priority basis

As per Allotment Document.

8 Annexure I- Format of Power of Attorney. In case of the Joint Venture Company whether the Power of Attorney is to be signed by the Chief Executive of the Joint Venture Company or the Power of Attorney is to be issued by the parent companies separately in favour of the Joint Venture Company.

The Power of Attorney is to be signed by Chief Executive Officer or such other official of the Applicant i.e. the JV Company in this case.

9 Annexure II- Format of Affidavit. In case of the Joint Venture Company whether the Affidavit is to be signed by the Chief Executive of the Joint Venture Company or the Affidavit is to be issued by the parent companies separately in favour of the Joint Venture Company.

The Affidavit is to be signed by Authorised Signatory of the Applicant i.e. the JV Company in this case.

S. No. Query Response 10 Schedule II- General Information-

*if the Application is for multiple End Use Plants, information required under 3.1 to 3.8 should be furnished for each of the End Use Plant. The clause-3.1 to 3.8 should be amended to read as 4.1 to 4.8 which is a typographical error.

This should be read as if the Application is for multiple End Use Plants, information required under 4.1 to 4.8 should be furnished for each of the End Use Plant.

11 Schedule II- General Information- **Coal requirement shall be calculated on the basis of benchmarks. As on date GCV and consumption norms are unknown.

Benchmark consumption norm shall be provided shortly.

12 While downloading for each coal block, no Allotment Document found separately for that block like that of coal blocks for auction given.

Single Allotment Document has been issued for all the Coal Mines being allotted.

13 No files are available while trying to download for Parsa, Tadicherla-I, Mahanadi-Machchhakata & Utkal D&E.

Files have been Uploaded

14 Clause 3.7 1. Upfront amount for each coalblock is not provided.

Shall be provided shortly.

15 Clause 3.2.2 1. What about if application for coal linkage is pending with GoI ? 2. Is it require to submit any certificate for the expenditure incurred w.r.t. specified end-use ? If require, then who has to certify ?

1. Applicant is eligible to submit Application. However, as per Allotment Document, the Applicant shall commit to surrender any linkage for the same End Use Plant, if it is awarded at a later date. 2. No separate certificate is required to be submitted for expenditure incurred. Formats, Schedules and documents as mentioned in the Allotment Document are required to be submitted.

16 Clause 6.1 (a) 1. Requirement of coal for power generation capacity coming up in the state till the year 2017. Who has to certify?

This information shall be provided by CEA.

17 Clause 6.1 (b) 1. Proximity of the end use plant from the coal mine. Is there any limit ? What about end-use plant is far away from coal block?

Priority will be given to Applicants with Specified EUP closer to the Coal Mine, as per Clause 6.1 of the Allotment Document.

S. No. Query Response 18 Clause 10.2 That the Applicant has coal linkage [insert details of coal linkage

and linked Specified End Use Plant(s) and …… What to write if application for coal linkage is pending with GoI ?

Such information is to be provided. Applicant shall commit to surrender any linkage for the same End Use Plant, if it is awarded at a later date.

19 Clause 10.3 [Insert separate paragraph for each ………] 1. Whether the documents submitted/ will be submitted are to be mentioned? 2. Whether Affidavit & verification will be signed by the same person, i.e, the Authorized signatory?

1. Yes, the documents submitted physically or uploaded on MSTC website are required to be mentioned. 2. Yes, these are to be signed by the Authorized Signatory of the Applicant.

20 Power of Attorney (PoA) & Affidavit No. 9 Annexure I & II 1. Value of stamp not indicated 2. Whether One PoA and One Affidavit is sufficient for all the mines and end use or separate documents for each mine shall be required Suggestion: PoA in Rs 100 stamp paper and Affidavit in Rs. 100

1. Value of stamp paper shall be in accordance with applicable laws. 2. Separate PoA & Affidavit are required to be submitted for each Application

21 Hard copy of Affidavit & PoA Whether the Documents can be submitted by Hand also ?By hand submission shall also be permitted to avoid any postal delays.

Yes

22 Schedule II page 42 Specified End-use MPPGCL is having two units(600 MW each) in phase –I at SSTPS Khandwa with total linkage of 49.939 LMT for both units. Whether we can apply for coal block for a single unit? The allottee should surrender half / proportional quantity of coal linkage only. The allottee should surrender half / proportional quantity of coal linkage only.

As per Clause 3.2.2. of Allotment Document Application can be submitted only for unit or phase of Specified End Use Plants for which a coal linkage has not been granted. The Applicant can chose to submit Application for a single unit (Specified End Use Plant) subject to its commitment to surrender its existing coal linkage for the Specified End Use Plant.


Applicant having coal linkage shall have to surrender their existing coal linkage. This clause shall only be applicable when the linkage plus production from mine is more than the requirement of coal for the end use plant. Provision for surrender of only excess quantity over the requirement of end use plant should be allowed .

As per Clause 3.2.3. of Allotment Document.

24 Clause 3.2.2 The Applicant shall have incurred an expenditure of not less than thirty per cent (30%) of the total project cost of the unit or phase of the Specified End Use Plant(s) for which a coal linkage has not been granted. In case if expenditure incurred is less than 30% of the Total Project Cost of the units, is it possible to waiver the 30% expenditure clause. Suggested Text: The applicant shall have taken advance action for construction of power plant including land acquisition and for which coal linkage has not been granted. NUPPL, a JV company of NLC and UPRUVNL (with paid up capital ratio 51:49) has proposed to establish 3 units of 660 MW at Ghatampur (UP) at the cost of Rs. 14375 cr. The capital cost is Rs. 4791.66 cr per unit. The expenditure incurred is Rs. 150 cr i.e. about 3% of capital cost per unit. Pachwara South coal block is also allotted for this project. But progress of development is very slow due to law and order problem. Therefore, new block is required. After allotment, the existing block will be surrendered.

As per Clause 3.2.2 of the Allotment Document.

25 1.1.10 :"Authorised Signatory" shall mean the individual representing an Applicant who has been duly authorised on behalf of such Applicant to execute and submit the Application in accordance with the terms hereof. Who has to authorize the AUTHORISED SIGNATORY ?Whether Managing Director, or Company Secretary etc.,

Managing Director/ CMD/ Chief Executive Officer/ Chairman

S. No. Query Response 26 12: SCHEDULEI: Application Form Applicant's Ref. No.:

Is the Applicant's Ref. No.same as Bidder Ref No. provided by MSTC after executing registration? If not , what is this number?

Applicant's Ref. No. is same as Bidder Ref No. provided by MSTC.

27 12: SCHEDULEI: Application Form.: (Last Para) In terms of Clause d)(b) of Allotment Document, we are enclosing herewith power of Attorney & affidavit in the name of the person who has signed this offer on behalf of the firm. 1. What is Clause d)(b) of Allotment Document ? 2. Who is authorized signatory to sign the Schedule I: Application Form? Whether the Managing Director, or the Company Secretary, or the Authorised Person etc.,

1. Clause d)(b) should be read as Clause 4.5.2 (b) 2. Application forms provided in Annexure IV to be signed by Authorised Signatory

28 Clause 12: Schedule II : General Information 4.6 Project Cost (Rs Crores) 4.7 Cost incurred as on December 31,2014 Whether it has to be certified by the Company or Chartered Accountant?

Schedule II is to be signed by the Authorised Signatory of Applicant. No additional certification is required.

29 3.2.3 - However, an Applicant having coal linkage shall also be considered for Allotment for their existing Specified End Use Plant(s), if such Applicant commits to surrender their existing coal linkages for the same. The existing coal linkage shall then be tapered off as per extant policy. Whether coal linkage can be extended till the development period of coal block allotted for Specified End Use Plant(s)?In case specified end use power plant is already commissioned, surrendering coal linkage without having coal supply from allotted coal block will result in no fuel supply to end use power plant. Suggestion: 3.2.3 - However, an Applicant having coal linkage shall also be considered for Allotment for their existing Specified End Use Plant(s), if such Applicant commits to surrender their existing coal linkages for the same. The existing coal linkage shall then be tapered off after commencement of coal production from allotted coal block as per extant policy.

As per Allotment Document

S. No. Query Response 30 Clause 3.4.2 (f) Notwithstanding the above, in the event that the Nominated

Authority or the Central Government determines that a Preferred Applicant should not be declared the Allottee on account of any reason whatsoever, including without limitation the withdrawal of the Preferred Applicant from the allotment process for the Coal Mine or the Preferred Applicant ceasing to comply with the Eligibility Conditions, then the Coal Mine may be subjected to re-allotment or being granted to the custody of a Designated Custodian, and this allotment process may be annulled. In case of withdrawal of preferred applicant, coal block shall be allotted to the second applicant. Carrying reallotment process again will further delay the process of allocation of coal blocks. Suggestion: Notwithstanding the above, in the event that the Nominated Authority or the Central Government determines that a Preferred Applicant should not be declared the Allottee on account of any reason whatsoever, including without limitation the withdrawal of the Preferred Applicant from the allotment process for the Coal Mine or the Preferred Applicant ceasing to comply with the Eligibility Conditions, then the Coal Mine shall be allotted to second preferred applicant for allotment.

Clause 3.4.2 (f) shall be read as: "Notwithstanding the above, in the event that the Nominated Authority or the Central Government determines that a Preferred Applicant should not be declared the Allottee on account of any reason whatsoever, including without limitation the withdrawal of the Preferred Applicant from the allotment process for the Coal Mine or the Preferred Applicant ceasing to comply with the Eligibility Conditions, then the Coal Mine shall be allotted to second preferred applicant."

31 Clause 6.1 Evaluation of Applications: Point (a), (b), (c) 1. Whether any weightages given to point (a) and (b)? 2. Whether any weightage is given to readiness of specified end use power plant? 3. In case of State having power deficit and having more coal requirement for sustainable operation of power plant but power plants are not likely to be implemented by 2017, whether relaxation will be given to such end use plants in calculating coal requirement?

Applications shall be considered for the purpose of selection of Preferred Allottee as per Clause 6.1 of Allotment Document.

S. No. Query Response 32 3.2.1

(Eligibility requirement of the documents) The ministry is requested to clarify the eligibility of the applicant to bid for a particular coal block based on the extractible reserves vis-à-vis end use plant requirements. Since, the tender document for auction of the coal has specified that, Extractable reserves of the Coal Mine should not exceed 150% of the annual coal requirement for 30 years of the Specified End Use Plant(s), The ministry is requested to clarify whether any such similar eligibility criteria for coal block exists for allotment as well?

Eligibility for Allotment shall be as per Allotment Document. No such eligibility criteria.

33 Clause 3.2.2. “The Applicant shall have incurred an expenditure of not less than thirty per cent (30%) of the total project cost of the unit or phase of the Specified End Use Plant(s)…….” • Schedule II of the Allotment Document under Annexure-IV (Sr. No. 4.7) The Ministry is requested to clarify whether the applicant is required to submit the certificate from the Charter Accountant certifying the actual cost incurred by the Petitioner till 31st December 2014.

Schedule II is to be signed by the Authorised Signatory of Applicant. No additional certification is required.

34 Clause 3.2.2 & 3.2.3 “…..3.2.2 The Applicant shall have incurred an expenditure of not less than thirty per cent (30%) ……. ….. 3.2.3 However, an Applicant having coal linkage shall also be considered for Allotment for their existing Specified End Use Plant(s), if such Applicant commits to surrender their existing coal linkages…..” • From the clause 3.2.2 & clause 3.2.3, it is inferred that the already existing (operational) plants having coal linkage would be considered for allocation. • However, from the above, it is not clear whether the upcoming plants where more than 30% of the expenditure has been incurred would be eligible to apply for the allocation or not.

As per Clause 3.2.2 of the Allotment Document, operational plants/under construction unit or phase of a plant for which an expenditure of not less than 30% of total project cost has been incurred and for which a coal linkage has not been granted shall be eligible for Allotment. As per Clause 3.2.3 of the Allotment Document, an Applicant having coal linkage shall also be considered for Allotment for their existing Specified End Use Plant(s), if such Applicant commits to surrender their existing coal linkages for the same.

S. No. Query Response • The Ministry is requested to clarify the same.

35 Clause 5.2.2 “…… Subsequent to registration, Applicants may download the second set of documents, including: (a) the Mine Dossier specific to the Coal Mine; and (b) Allotment Document. In the website, the Allotment Document for specific coal mine has not been found under second set of documents.

Single Allotment Document has been issued for all the Coal Mines being allotted.


“…… Subsequent to registration, Applicants may download the second set of documents, including: (a) the Mine Dossier specific to the Coal Mine; and (b) Allotment Document. “ The mine dossier for the following coal mines (covered in Annexure-IV & List of Coal Mines published for Allotment), are not available on the MSTC Website: • Parsa. • Gare Palma Sector II. • Mahanadi, Machhakata. • Utkal D, Utkal E. • Chendipada, Chendipada II. • Tadicherla-I. The Ministry is requested to clarify as to when the mine dossier for the said coal blocks would be available on MSTC website or whether the said blocks are excluded from the allotment procedure.

Files have been uploaded

37 Clause 4.5.2 & 4.5.4 “In addition to submission of Application electronically, Applicants are also required to submit hard copy(ies) of following documents…..” Ministry is requested to provide the deadline for the submission of hard copies of affidavit and Power of Attorney

As per Clause 4.5.4 of Allotment Document. For Last Date, kindly refer to Clause 3.6.1

S. No. Query Response 38 Clause 6.1

“In the event that, more than one Application is considered to be in compliance with all the Eligibility Conditions and responsive pursuant to Clause 3.5, then such Applications shall be considered for the purpose of selection from amongst the qualified Applicants in accordance with following norms: a) Requirement of coal for power generation capacity coming up in the State till the year 2017……” The Ministry is requested to clarify whether the capacity added till 2017 would include only those plants wherein the expenditure of atleast 30% of the project cost has been incurred till 31st December 2014 or would include those plants as well where the expenditure till the aforesaid date is less than 30% of the project cost.

Eligibility Criteria for Allotment shall be as per Clause 3.2 of Allotment Document. Applications shall be considered for selection as per Clause 6.1 of Allotment Document.

39 Clause 6.1 “……a) Requirement of coal for power generation capacity coming up in the State till the year 2017. b) Proximity of the end use plant from the coal mine. c) In case the Applicant is owned by a coal bearing State Government, relaxation from the above norms may be considered to encourage setting up of End Use Plant(s) close to pit-heads……” The Ministry is requested to clarify the methodology adopted for the evaluation of the application as to what would be the weightage for each of the norms provide in the clause 6.1.


40 Annexure-IV, Schedule-II, Sr. No. 4.4 The Ministry is requested to notify the average GCV of the coal available from the particular coal block.

Coal requirement to be submitted as per benchmarks. Benchmarks shall be uploaded shortly.

S. No. Query Response 41 Clause No. 3.6

Schedule of Allotment process Last date of submission of Application – 6th Feb 2015 The Ministry is requested to extend the timeline for submission of Application, as GSECL being a Govt. Company, requires considerable time to take the requisite approval.

The allotment process will be conducted as per the Schedule provided under Clause 3.6.1 of the Allotment Document.

42 1.1.21 “Preferred Applicant” shall have the meaning ascribed thereto in (a) Clause 3.4.2(c) – in case where only one Application is considered to be in compliance with all the Eligibility Conditions and is responsive pursuant to Clause 3.5; or (b) Clause 3.4.2(d) – in case where more than one Application is considered to be in compliance with all the Eligibility Conditions and is responsive pursuant to Clause 3.5. The sentence under Clause (b) i.e. 3.4.2 (d) is not complete due to omission. Clarity may be put in accordingly.


43 1.1.23 – Reference Index “Reference Index” shall mean: (a) in cases where Specified End Use is generation of power, the pre-specified escalation formula that is prescribed in the prevailing bidding document for Case 1 bidding as formulated by Ministry of Power for escalation of fuel cost from captive mines; (b) in cases where Specified End Use is other than generation of power, the Reference Index shall be the Wholesale Price Index published in the month of April of the relevant year. Escalation formula for power generation to be given in Allotment Document

As per Allotment Document. For Reference Index kindly refer to new bidding document for Case 1 bidding available at Ministry of Power's website.


Section 5(1) of the Ordinance prescribes eligibility for allotment of Schedule I coal mines (as defined in the Ordinance), which includes the Coal Mine. Applicants are required to ensure that they meet the conditions mentioned in Section 5(1) of the Ordinance which is quoted below for reference: Section 5. (1) of the Ordinance: “5(1) Notwithstanding the provisions contained in sub-sections (1) and (3) of section 4, the Central Government may allot a Schedule I coal mine to a Government company or corporation which is not a joint venture with private company or to a company which has been awarded a power project on the basis of competitive bids for tariff (including Ultra Mega Power Projects) from specified Schedule I coal mines by making an allotment order in accordance with such rules as may be prescribed and the State Government shall grant a reconnaissance permit, prospecting licence or mining lease in respect of any area containing coal to such company or corporation: Provided that the Government company or corporation may carry on coal mining in any form either for its own consumption, sale or for any other purpose in accordance with the permit, prospecting licence or mining lease, as the case may be. Provided further that no company other than a Government company or corporation shall hold more than twenty-six percent of the paid up share capital in the Government company or corporation or in the joint venture between a Government company or corporation, either directly or through any of its subsidiary company or associate company. Provided also that a joint venture of any two or more Government companies or corporations shall be prohibited from alienating or transferring any interest, except the taking of loans or advances from a bank or financial institution, in the joint venture of whatsoever nature including ownership in favour of a third party.” With existing provision, any no. of private company with less than 26% share can become a joint venture partner of Government Company.

As per the Ordinance, Rules and the Allotment Document.


Upon allocation of the Coal Mine, the Allottee may revise the mine plan for extraction of more coal in accordance with the provisions of Applicable Law and the Allotment Agreement. Suggested Text Upon allocation of a Coal Mine, the allottee may revise the mining plan of the Coal Mine for a. Increase in the rate of Coal Production. b. Rationalize Land Use Management for reducing Land coverage. c. To achieve improved environmental compatibility. d. Rationalize overburden Management. e. Revisit river rerouting to increase coal extraction The added items (b) to (e) would be environment friendly & cost effective


46 Clause no. 3.2.2: The Applicant shall have incurred an expenditure of not less than 30% of the total project cost of the unit or phase of the Specified End Use Plant(s) for which a coal linkage has not been granted. Clause no.3.2.2 may be exempted for Power projects of which all developmental activities (Land Acquisition and statutory clearances) are completed and awaiting for Coal linkage from Ministry of Coal. For some of APGENCO projects, Coal linkage has been pending before Ministry of coal from 2012. MoEF permission has been pending for want of firm coal linkage. And all other permissions have already been obtained. Therefore, Power projects with less than 30% expenditure and with all clearance except coal linkage may be allowed to participate for allocation of


S. No. Query Response coal block

47 Clause No. 1.1.18 "Ordinance" shall mean the Coal Mines (Special Provisions) Ordinance, 2014 or the Coal Mines (Special Provision) Second Ordinance, 2014 as the case may be." The Coal Mines (Special Provisions) Ordinance,2014 has been repealed as per section 33(1) of The Coal Mines (Special Provisions) Second Ordinance, 2014 so The Coal Mines (Special Provisions) Ordinance, 2014 shall be removed from the definition of Ordinance. Suggested Text "Ordinance" shall mean the Coal Mines (Special Provision) Second Ordinance, 2014."


S. No. Query Response 48 Clause No. 1.1.27

"Specified End Use Plant(s)" shall mean one or more plant of the Applicant engaged in the Specified End Use. The definition does not include the plant of the JV partner's plant to be identified as Specified End Use Plant. Further, for achieving better efficiency and management, state government may nominate one of its company for allotment of coal blocks for better management while identifying a plant owned by another govenrment company as specified end use plant. Therefore specified end use plant of another government company shall also be considered under the definition if so nominated by state government. As the JV is also eligible for seeking allotment of mine as per the provision of the Oridnance, so the JV Partner's Plant shall be considered to be identified as Specified End Use Plant. Further, for achieving better efficiency and management, state government may nominate one of its company for allotment of coal blocks for better management while identifying a plant owned by another govenrment company as specified end use plant. Therefore specified end use plant of another government company shall also be considered under the definition if so nominated by state government.

As per the Eligibility Conditions specifed in Clause 3.2.2 of the Allotment Document, the Applicant shall have incurred an expenditure of not less than thirty per cent (30%) of the total project cost of the unit or phase of the Specified End Use Plant(s) for which a coal linkage has not been granted. However, in cases where Applicant is a JV of two or more Government Companies, any JV partner shall meet the the above criteria.

S. No. Query Response 49 Clause no- 3.2.1“ 5 (1)

Notwithstanding the provisions contained in sub-sections (1) and (3) of section 4, the Central Government may allot a Schedule I coal mine to a Government company or corporation which is not a joint venture with private company or to a company which has been awarded a power project on the basis of competitive bids for tariff (including Ultra Mega Power Projects) from specified Schedule I coal mines by making an allotment order in accordance with such rules as may be prescribed and the State Government shall grant a reconnaissance permit, prospecting licence or mining lease in respect of any area containing coal to such company or corporation: The Section 5(1) of Ordinance is wrongly quoted. The Correct provisions of 5(1) is contained in the Coal Mines (Special Provisions) Second Ordinance, 2014.

It shall read as: "Notwithstanding the provisions contained in sub-sections (1) and (3) of section 4, the Central Government may allot a Schedule I coal mine to a Government company or corporation or to a joint venture between two or more Government companies or corporations or to a company which has been awarded a power project on the basis of competitive bids for tariff (including Ultra Mega Power Projects) from specified Schedule I coal mines by making an allotment order in accordance with such rules as may be prescribed and the State Government shall grant a reconnaissance permit, prospecting licence or mining lease in respect of any area containing coal to such company or corporation:"

50 Clause no- 3.2.2 The Applicant shall have incurred an expenditure of not less than thirty per cent (30%) of the total project cost of the unit or phase of the Specified End Use Plant(s) for which a coal linkage has not been granted. Rather than using the 30% threshold, it is suggested that fair and objective criteria such as award of EPC Contract for Power Plant alongwith advance and commencement of construction, be taken into consideration for qualifying the Applicants. As the coal is being sought for specified end use only, provisions of the Allotment Document should seek expenditure on the Specified End Use Plant (s) for which the allotment is being applied for.


S. No. Query Response 51 # As per section 5(1) of the Ordinance, a Government Company which is not a

Joint Venture with private company, is eligible for allotment of a Schedule-I coal mine /coal-block. It is also mentioned that the Government Company may carry on coal mining in any form either for its own consumption, sale or for any other purpose in accordance with the mining lease. # Odisha Mining Corporation Ltd (OMC) is a mining company of Odisha State Government, primarily engaged in mining of iron ore, manganese, bauxite etc. OMC has diversified its activities and entered into thermal power generation in the year 2007, by forming a J.V Company with another State PSU, namely Odisha Hydro Power Corporation Ltd. (OHPC) on 50:50 sharing basis. This J.V Company under the name of Odisha Thermal Power Corporation Ltd (OTPCL) is now setting up a thermal power plant of 3 X 800 MW capacity. # It is proposed that with its core competency in mining sector and its financial capability, OMC may develop coal-blocks to be allocated by the Central Government for supply of coal to the power plants being set up by OTPCL and also for the future expansion programmes. # It is requested to clarify as to whether OMC is eligible for allotment of coal-block(s) by the Central Government under the above proposed arrangement.

As per the Eligibility Conditions specifed in Clause 3.2 of the Allotment Document, a joint venture of two or more Government companies or corporations is eligible subject to Clause 3.2.2 and 3.2.3

52 3.2.2. The Applicant shall have incurred an expenditure of not less than thirty per cent (30%) of the total project cost of the unit or phase of the Specified End Use Plant(s) for which a coal linkage has not been granted. As, under Rule 11 of Coal Mines (Special Provision) Rule 2014, which governs allotment of coal blocks, there is no such stipulation for qualification on the basis of percentage of total expenditure incurred in the end-use project. • For Government Companies like NTPC, before investment approval is


S. No. Query Response accorded by the Board under “Maharatna Powers” in any new power project, the following are necessities : • Coal linkage / coal mine allotment from Ministry of Coal • Environmental clearance for the end-use project as well as linked coal mine • Land and water availability in totality • Power Purchase Agreement (PPA) in place As per the MOEF stipulations, the environment clearance of a power project will only be considered after availability of environment clearance of the linked coal block, which in turn is dependent on St-I forest clearance of the block. Thus, prior identification of coal block and substantial progress in the coal block development in terms of availability of St.I forest clearance & environment clearance are a must before taking investment decision and award of main plant packages for any end-use power project for a Government Company like NTPC. • Accordingly, it is not possible for NTPC or its JV/Subsidiary companies to make any such expenditure before the coal linkage/coal mine is allocated to NTPC. • The same clarification was brought into the notice to Ministry of Coal (Nominated Authority) vide NTPC’s communication dated 23.11.2014 while submitting comments against Clause No. 10(4) (d) (I) & (II) of the Draft Rules under “Coal Mines (Special Provisions) Ordinance 2014”. Hence, it is requested that the condition for amount (%) of expenditure incurred in the implementation of end-use project be de-linked as a part of qualification for allotment of coal blocks.


"However, an Applicant having coal linkage shall also be considered for Allotment for their existing Specified End Use Plant(s), if such Applicant commits to surrender their existing coal linkages for the same. The existing coal linkage shall then be tapered off as per extant policy. " An Applicant having coal linkage shall also be considered for Allotment for their existing Specified End Use Plant(s), to fulfil requirement of coal at 92% PLF, in excess of existing coal linkages for the same end-use plant, if existing coal linkage is at less PLF. And, in such cases, the existing coal linkages shall not be tapered off. NTPC operates its coal-based power plants at higher PLF and may be allowed to apply for coal block(s) to meet the shortfall in coal supply wrt coal requirement of end-use power stations at 92% PLF : • Annual Contracted Quantity (ACQ) against the existing coal linkages from CIL subsidiary companies for coal-based power generating capacity commissioned till March 2009 is for supply of coal at 85% PLF (against requirement of coal at about 92% PLF). And, coal receipt corresponds with only about 80% of PLF in such generating stations. • Similarly, coal receipt in the coal-based power generating capacity commissioned beyond March 2009 till date corresponds with only about 63% of PLF in such generating stations (against requirement of coal at about 92% PLF).



Prior to submission of Application, the Applicants are encouraged to undertake the site visit to Coal Mine, at their cost and ascertain for themselves the site conditions, location, communication, climate, availability of power, Applicable Laws and regulations, and any other matter considered relevant by them in the manner provided herein. 4.4.2 ...for a visit to the Coal Mine until 3 Business Days prior to the Last Date. Last Date for submission of application may be extended so that Applicants may get enough time to visit the sites of these coal blocks, which are located in six different States.

The allotment process will be conducted as per the Schedule provided under Clause 3.6.1 of the Allotment Document.

55 3.2 (Eligibility Requirement for Applicants) Whether Captive Power Generators qualify to participate in the ALLOTMENT process for the coal blocks earmarked for Specified End Use Plant (EUP) under POWER category.

Specified End Use as defined in Clause 2.3.1 does not include generation of power for captive use.

56 3.2 (Eligibility Requirement for Applicants) JOINT ALLOCATION OF COAL MINE: In case the individual applicant's requirement for Specified EUP is on the lower side and does not match with the Minable Reserves of the any coal block in the list, Will there be JOINT ALLOTMENT with other applicant(s)? Govt. of India may club the requirement of different applicants and jointly allot a single mine/ mines to match the coal requirement of the EUPs with the Minable Reserves of the any coal block in the list.

As per Allotment Document Joint Ventures are permitted to participate in the process.

S. No. Query Response 57 Annexure VI:

Particulars of the coal mine and upfront amount Utkal-D & Utkal-E coal blocks have been mentioned under one serial number in the allotment list. It may be clarified whether both blocks will be taken as single Block and if not, whether applications are to be made separately for individual blocks. Suggestion Coal blocks under a particular Sl. No. can be considered separately/ jointly as per requirement of an EUP. This is necessary for matching the requirement of the EUP with the mineable reserve of the coal mine.

UtkaL D & Utkal E coal mines will be considered as a single mine under the current allotment process. Further, Upfront Amount to be paid in respect to each coal mine indicated at Annexure VI of the Allotment Document will be uploaded shortly.

58 3.2.3 (Eligibility requirement of the applicant), 8.2.4 & Annnexure II (Para -2 of Format for Affidavit) TAPERING OF COAL LINKAGE: After the allotment of the new coal block, whether existing coal linkage has to be surrendered immediately or will tapering of linkage will be linked to production from the coal mine. Para-2 of Annexure II Format for Affidavit: That the Applicant has coal linkage [insert details of coal linkage and linked Specified End Use Plant(s)] and commits to surrender such coal linkage without any reservation or condition with the production coal for the allotted coal mine in case the coal mine is allotted against the coal requirement presently fully met by coal linkage. Coal from the allotted coal mine may utilized for meeting the shortfall in linkage. Hence, the coal requirement projected is over above the coal linkage available. Schedule III coal mines are not yet operational. Hence surrendering an existing coal linkage for the EUP, particularly operational units, before execution of the Allotment Order for such mines may not be possible and may lead to stoppage of the plant.

As per Clause 3.2.3 of the Allotment Document

S. No. Query Response 59 6.1(a)

What is the implication of requirement of coal for the power generation capacity coming up in the state till the year 2017? The requirement may not be relevant for a CPP

Specified End Use as defined in Clause 2.3.1 does not include generation of power for captive use.

60 Clause 4.12.1 Utilisation of Coal The Allottee shall not be permitted to use the coal extracted from the Coal Mine for any purposes other than utilisation for Specified End Use. Any middling or washery rejects generated from the Coal Mine may be sold by the Allottee and the Allottee shall maintain separate records for the middling or washery rejects. However, the ` In case, if the allottee wishes to setup a reject based power plant, In that case will the allottee be allowed to set up a Reject based power project based on the Rejects at Pit Head.

Utilisation coal from Coal Mine shall be as per Clause 4.12.1. Allottee may use middlings and rejects in their reject based power plant.

61 4.1.1: “No Applicant shall submit more than 1 (one) Application for the Coal Mine, either directly or indirectly. However, the Applicant can apply for more than one coal mine for same Specified End Use Plant.” Clause 4.1.1 Prohibits one Applicant to submit more than one application for a coal mine, either directly or indirectly

1. An Applicant can submit only one Application for a particular Coal Mine with reference to a particular Specified EUP. However, such Applicant is allowed to submit separate Applications with respect to above Specified End Use Plant for coal mines other than one for which an application has already been submitted. In other words, an Applicant can submit only one Application for one Coal Mine with respect to one Specified End Use Plant. Thus, an Applicant can submit another Application for the same coal mine for a different EUP.

62 It is not clear whether a single mine can be allotted to two Applicants. Earlier cases of joint allocation of a single mine to more than 1 (one) allocatee has not seen much success, and has been seen to have slowed down the development of the mine.

As per Clause 3.2 of Allotment Document.

S. No. Query Response 63 3.2.3 ( Eligibility)

Whether state power utilities, which were having coal blocks and are now cancelled, are required to surrender any linkage if they are applying for same linkage from new coal block.

As per Clause 3.2.2 and 3.2.3 of the Allotment Document

64 3.4.3 a) furnish the Performance Security as specified in Clause 7 (b) pay a fixed amount for the value of Land and Mine Infrastructure, cost of preparation of geological report borne by the Prior Allottee, cost of obtaining all statutory licenses, permits, permissions,approvals, clearances or consents relevant to the mining operations, borne by the Prior Allottee (collectively the “Fixed Amount”). If the Allottee is a Prior Allottee, then, the compensation payable to such Allottee shall be set off or adjusted against the Fixed Amount payable by such Allottee. (c) pay the first instalment of the Upfront Amount as mentioned in Annexure VI against the Coal Mine. The amount applicable for each mine needs to be intimated for each sub head (a), (b) and (c).

a) shall be computed as per 7.1.1 of Allotment Agreement. b) & c) shall be uploaded shortly on MSTC's website.

65 Annexure-II Format of Affidavit That the Applicant has coal linkage [insert details of coal linkage and linked Specified End Use Plant(s)] and commits to surrender such coal linkage without any reservation or condition before execution of the Allotment Order in case the Applicant is declared as Allottee. In place of "surrender such coal linkage", it should be "surrender of linkage in proportion to allotted linkage from the coal block"



However, an Applicant having coal linkage shall also be considered for Allotment for their existing Specified End Use Plant(s), if such Applicant commits to surrender their existing coal linkages for the same. The existing coal linkage shall then be tapered off as per extant policy. Whether coal linkage can be extended till the development period of coal block allotted for Specified End Use Plant(s)?


67 3.4.2(f) - Notwithstanding the above, in the event that the Nominated Authority or the Central Government determines that a Preferred Applicant should not be declared the Allottee on account of any reason whatsoever, including without limitation the withdrawal of the Preferred.Applicant from the allotment process for the Coal Mine or the Preferred Applicant ceasing to comply with the Eligibility Conditions, then the Coal Mine may be subjected to re-allotment or being granted to the custody of a Designated Custodian, and this allotment process may be annulled. In case of withdrawal of preferred applicant, coal block shall be allotted to the second preferred applicant.

Clause 3.4.2 (f) shall be read as: "Notwithstanding the above, in the event that the Nominated Authority or the Central Government determines that a Preferred Applicant should not be declared the Allottee on account of any reason whatsoever, including without limitation the withdrawal of the Preferred Applicant from the allotment process for the Coal Mine or the Preferred Applicant ceasing to comply with the Eligibility Conditions, then the Coal Mine shall be allotted to second preferred applicant."

S. No. Query Response 68 6.1 - In the event that, more Clause 3.5, then such Applications shall be

considered for the purpose of selection from amongst the qualified Applicants in accordance with following norms: a) Requirement of coal for power generation capacity coming up in the State till the year 2017. b) Proximity of the end use plant from the coal mine. c) In case the Applicant is owned by a coal bearing State Government, relaxation from the above norms may be considered to encourage setting up of End Use Plant(s) close to pit-heads 1. Whether any weightages given to point (a) and (b) 2. Whether any weightage is given to readiness of specified end use power plant? 3. In case of State having power deficit and having more coal requirement for sustainable operation of power plant but power plants are not likely to be implemented by 2017, whether relaxation will be given to such end use plants in calculating coal requirement?


69 3.4.3 (b): pay a fixed amount for the value of Land and Mine Infrastructure, cost of preparation of geological report borne by the Prior Allottee, cost of obtaining all statutory licenses, permits, permissions, approvals, clearances or consents relevant to the mining operations, borne by the Prior Allottee (collectively the “Fixed Amount”). If the Allottee is a Prior Allottee, then, the compensation payable to such Allottee shall be set off or adjusted against the Fixed Amount payable by such Allottee. i)If the land is vested with the State Government and is yet to be transferred to the prior allotee, whom the payment shall be made. (ii)What will be the mechanism for transfer of Title of the land concerned? (iii) If any dispute raised by the land oustee subsequently on transfer of land to

As per Allotment Document, Ordinance and Rules. Further it is clarified that the Coal Mine alongwith Land and Mine Infrastructure will be transferred to the Allottee through Allotment Order on 'as is where is basis'.

S. No. Query Response the successful allottee, who shall be held responsible for settlement of the dispute with the land oustee?

70 3.4.5 : The Allottee shall be responsible for exploration (if required), obtaining all approvals/clearances, acquisition of land, as applicable, rehabilitation, financing, development, mining and the operation and maintenance of the Coal Mine, and subsequent closure of the Coal Mine in accordance with the provisions of the Allotment Order and the Allotment Agreement (i) Whether Mine Developer cum Operator can be engaged by the allottee? (ii) Clearances from State and Central Government agencies – whether any time frame will be fixed? (iii) In case, Forest Clearance was denied for Barjora (North) coal mine earlier, whether it will be allowed this time by the concerned authority of State and Central Government?

(i) MDO can be engaged. Standard framework for appointment of MDO shall be provided. (ii) & (iii) As per Allotment Document

S. No. Query Response 71 4.1.1:

No Applicant shall submit more than 1 (one) Application for the Coal Mine, either directly or indirectly. However, the Applicant can apply for more than one coal mine for same Specified End Use Plant A Power Plant is having 2x 500 MW and coal reserve in a particular mine is insufficient, can application be made for two different mines for the total capacity of the plant or application will have to be made for each unit separately for different coal mines? What will be the allotment criteria?

As per Clause 4.1.1, the Applicant can apply for more than one coal mine for same Specified End Use Plant.

72 7.1.1: The Allottee shall provide to the Government an irrevocable and unconditional guarantee from an Acceptable Bank at Delhi, for the performance of its obligations within such time as specified in Clause 3.6. In case, delay is attributable to State or Central Government authority, whether the Allottee shall be held responsible for the delay?


73 4.10.3 Extension of Last Date of Submission


74 Clause 4.12.1 Utilisation of Coal The Allottee shall not be permitted to use the coal extracted from the Coal Mine for any purposes other than utilisation for Specified End Use. Any middling or washery rejects generated from the Coal Mine may be sold by the Allottee and the Allottee shall maintain separate records for the middling or washery rejects. However, the middling or wahsery rejects generated from the Coal Mine shall not exceed the normative limits. In case, if the allottee wishes to setup a reject based power plant, In that case will the allottee be allowed to set up a Reject based power project based on the Rejects at Pit Head.

Utilisation coal from Coal Mine shall be as per Clause 4.12.1. Allottee may use middlings and rejects in their reject based power plant.

S. No. Query Response 75 3.2.2.The Applicant shall have incurred an expenditure of not less than thirty

per cent (30%) of the total project cost of the unit or phase of the Specified End Use Plant(s) The idea is to cover the power plant coming up by 2017. In case the Govt. company is able to confirm that plant would come up by 2017 the provision of incurring of minimum 30% expenditure be deleted or at least relaxed.


76 3.2.3.The existing coal linkage shall then be tapered off as per extant policy In various cases the Annual Contract Quantity does not meet the entire annual requirement of coal of a unit of power generation. Besides ACQs consist of various grades and different grade mix and then GCV as received in plant varies. This is creating a large gap between the Required Quantity and ACQ, let alone the gap between Received Quantities which is further less than ACQ. In the event the Annual Mine Plan capacity of the coal block is not more than the gap between the Required Quantity and ACQ there must not be any reduction in FSA Quantities.

As per Clause 3.2.3 of the Allotment Document

77 3.5.1(h): is generally considered to be responsive in terms of any other parameters as may be considered relevant by the Nominated Authority This should be specified in advance to avoid undue & arbitrary discretion


S. No. Query Response 78 6.1. Evaluation of Applications in the event that, more than one Application is

considered to be in compliance with all the Eligibility Conditions and responsive pursuant to Clause 3.5, then such Applications shall be considered for the purpose of selection from amongst the qualified Applicants in accordance with following norms: a) Requirement of coal for power generation capacity coming up in the State till the year 2017. b) Proximity of the end use plant from the coal mine. c) In case the Applicant is owned by a coal bearing State Government, relaxation from the above norms may be considered to encourage setting up of End Use Plant(s) close to pit-heads. The selection norms are not clearly defined. In fact matrix with markings & appropriate weight age of each item should be developed to avoid ambiguity & discretion for bringing out more transparency.


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