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Auction of Schedule II Coal Mines

Queries & Responses To

Standard Tender Document Dated December 27, 2014

Part‐I

Nominated Authority Ministry of Coal

Government of India New Delhi

January 14, 2015

Auction of Schedule II Coal Mines – Queries & Responses (Part‐I)

Queries and Responses to Standard Tender Documents of all Schedule II Coal Mines Being Auctioned

S. No. Query Response 1 Clause 4.1.2 (b) Eligibility on the basis of coal requirement

1. What shall be the basis for calculating annual coal requirement? Can we arrive our coal requirement on the basis of Actual Coal consumption at our plant? 2. Different authorities / offices may have different norms leading to non‐parity in bids. May also lead to some bids turning non responsive bids on this consideration. 3. What is the factor to be used for IPP at different SHRs for different grades of coal? 4. Will the factor for CPP be the same as that for an Independent Power Plant? 5. In case of Power Plant, the GCV value is the parameter, please let us know what GCV would be allowed per MW of power plants. 6. In case of Sponge Iron, FC Content in coal is the basis for determining the quantity of coal required. 7. The coal requirement against Specified End Use Plant (EUP) shall be based on normative requirement of clean coal (washed coal) or ROM coal? Washery losses and transportation losses should be specified by the Ministry to have parity. 8. If the required Benchmark of coal requirement based on calorific value has not been published by any Govt. Agency, in such situation can we consider the calculation factor of 1.36 for coal consumption in DRI as provided by CMPDI in last Coal block auction on 12.02.2014. (It is important to specify the benchmark for each coal block as in practice each DRI use their own permutation and combination for coal consumption) 9. Clarification for Coal Block Allotted for Iron Steel, Cement, CPP End Use and having Washery with lower washing yields and generating Middling and Rejects. It will be mandatory by June’2016 to supply not more than 34% ash coal for a distance more than 500 km as per MoEF guidelines (Cl 2 (c) MoEF Notification in Gazette of India dated 2nd Jan 2014. Hence the coal requirement and size of block should be based on the washing yields while qualifying the Technical Bidders for a particular block) 10. Since the minable reserves cannot exactly match the coal requirement so calculated, what would be the criteria for qualifying/ disqualifying bidders in such cases? To illustrate, if the coal requirement for an end use plant (1200 MW capacity) calculated at 150% for 30 years works out to be 242 million tons (as also illustrated during the Pre Bid Meeting) and the target mine has minable reserves of say, 280 million tons , whether the end use plant will qualify to bid for such a mine, and. if not, then will it become necessary for the end use plant to have a capacity of approximately 1395 MW to be able to qualify to bid for this mine? It needs to be appreciated that such exact matching of the coal requirement of end use plant and reserves of the mine may not be possible. 11. Eligibility to be reduced pursuant to being Successful Bidder in any other auction process. However, Successful Bidder shall be declared only pursuant to receipt of direction from Central Govt. Can the bidder participate in auction till such time?

Annual Coal Requirement of the Specified EUP to be determined on the basis of Run‐of‐Mine (ROM) coal. The Coal Requirement shall be calculated using the GCV corresponding to weighted average grade of Coal Mine. Ministry of Coal shall provide the specific consumption norms for each type of Specified End Use. For this purpose, Clause 4.1.2 (b) para 2 of the Tender Document, Successful Bidder shall mean Preferred Bidder, Successful Bidder, Allottee or Preferred Allottee as the case may be.

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S. No. Query Response 2 Annexure III ‐ Format for Technical Bid

The coal requirement shall be calculated using the Gross Calorific Value in kcal/kg corresponding to weighted average grade of coal mine. The weighted average grade of each coal mine should be mentioned in the snap shot provided free in the MSTC website. For certain mines,the seam wise grade is not given and the coal extracted till date is of which grade is also not clear. So everyone will calculate on their own assumptions and will arrive at different figure.

These details are part of the Tender Document of the Mine.

3 Clause 4.1.2 (b) Eligibility on the basis of coal requirement It is clarified that a Bidder shall not be eligible to participate in any other auction...as specified above 1. Does it mean that a bidder for a Specified EUP cannot bid for more than one mine, if his requirement is met from that mine. What if he becomes unsuccessful in that bid? In other words does it mean that for a specific EUP one can only bid for "A MINE", only in case it meets his requirement. 2. Please clarify whether a Company can submit technical bids for both of the following mines for its End Use Plant (EUP‐A): Coal Requirement of EUP A: 12 MT Eligibility for coal mines with reserve upto 150%: 18 MT Extractable reserve of Mine X: 18 MT Extractable reserve of Mine Y: 17 MT 3. We have got three CPPs having total installed capacity of 258 MW, which translates to the coal requirement of about 80 million tonnes i.e 150% for 30 years. In this scenario, we are bidding for schedule II coal mines for our total requirements i.eupto 80 million tonne. But during the Sch II bidding process, Sch III bidding process also has started. So can we bid for any additional blocks in Sch III mines for the same EUPs, as the outcome of Sch II process is not yet declared. We will surrender the additional blocks beyond our requirements once Sch II auction is decided.

For a specified EUP, a bidder can bid for multiple Coal Mines subject to eligibility conditions specified in Clause 4.1 of the Tender Document. However, if the bidder becomes Preferred Bidder, Successful Bidder, Allottee or Preferred Allottee as the case may be,pursuant to any other auction or allotment process conducted by the Nominated Authority under the Ordinance and the Rules, then the eligibility on the basis of coal requirement shall be reduced by the requirement of coal of such Specified End Use Plant met from any other coal mine allocated to the Successful Bidder pursuant to such auction or allotment process.

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S. No. Query Response 4 Clause 4.1.1 and Rule 10(4)(d) of the Rules

in case a company is the successful bidder, then the entitlement to receive coal pursuant to such coal linkage shall stand proportionately reduced on the basis of the requirement of coal being met from the mine allocated to such company; 1. We understand that purpose of the auction is to meet coal requirement of industry and hence linkage reduction should be applicable only once the full requirement of the consumer is met from coal mine. Further such linkage surrender should be decided after allocation of coal from the mine to various EUPs of the bidder. 2. In case of multiple EUPs (each having a separate linkage) for a coal block, will the bidder be allowed to decide quantity of which linkage(s) is to be surrendered? (subject to maximum reserves eligibility of each EUPs). 3. Annual Coal Requirement (ACR) of EUP: Unit #1 – 2.5 MnTPA Unit #2 – 2.5 MnTPA 150% of ACR of both Units taken over 30 years – 225 MnT Unit#1 has linkage coal for 2.5 MnTPA. Coal eligibility for Unit#2 from captive coal block is 112.5 MnT (i.e.) 2.5 MnT*150%*30 years a. The EUP is declared as successful bidder for the block as below: Total Reserve – 112.5 MnT Peak Production as per Mine Plan – 3 MnT Since the block reserves just meet the requirement of Unit#2, please confirm that there will be no reduction in linkage coal already available against Unit#1. b. The EUP is declared as successful bidder for the block as below: Total Reserve – 150 MnT Peak Production as per Mine Plan – 6 MnT Balance coal available for Unit#1 from captive coal block is only 37.5 MnT. Please clarify whether the proportionate reduction in linkage coal already available against Unit#1 will be 0.83 MnTPA (i.e. 37.5 MnT/ 112.5 MnT * 2.5 MnTPA) 3. For the cement sector under the New Coal Distribution Policy, linkage is given only for 75% of the annual coal requirement. In such case, can company bid for the 25% unmet demand without affecting its linkage? 4. A bidder has two units (Unit‐1 & Unit‐2) at a single location. Unit‐1 already has linkage and hence, opts to bids only from Unit‐2 against 150% of annual requirement of Unit‐2. Bidder requests for prior permission to use the captive coal in Unit‐1 to meet only the short‐fall from CIL under linkage. Under this scenario, will the linkage coal quantity of Unit#1 be still reduced?

As per Tender Document and linkage policy as amended from time to time.

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S. No. Query Response 5 Annexure IV Clause 5

Upon execution of the Vesting Order and commencement of production from the Coal Mine my linkage of coal... In case a bidder has linkage coal for Unit#1, but is participating in the tender only for Unit#2, please confirm that this clause can be deleted.

Specified EUP shall be as per Clause 1.1.32 of the Tender Document and proportionate reduction in linkage coal shall be in accordance with Clause 4.1.1 of the Tender Document. In such a case, if the Bidder specifies Unit II as Specified EUP and the Specified EUP does not have a subsisting fuel linkage, then this clause may be deleted.

6 What procedure should be adopted for utilization or disposal of coal fines generated during handling and transportation from mines upto end use plant?

As per bidder's discretion.

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S. No. Query Response 7 Clause 5.7

Utilization of Coal 1. a. Please clarify whether the swapping of coal blocks among two successful bidder is allowed. b. The Ordinance allows swapping of coal blocks. Would bidder be allowed to factor in benefits of such swap arrangements in the bid strategy? 2. Please clarify whether the coal can be utilized in specified end use plant of the affiliates of the successful bidder in accordance with Rule 20 of the Rules. 3. Can the coal mined be used in other end use plants in case of a merger/ acquisition of a successful allottee in the future? 4. In case a successful bidder has multiple units of specified end use at the same location, but choose to participate in the tender from a specific unit, please clarify whether the successful bidder has to take prior permission from Central Government for usage of coal in other units of the same specified end use plant. 5. Please clarify whether the other Specified End Use Plants in which the successful bidder proposes to use the coal should also meet the eligibility conditions for participation in the tender as on the bid date.

1. a. Yes, in accordance with Clause 5.7.1 of the Tender Document. b. As per bidder's discretion 2. In accordance with Rule 20 of the Rules, coal can be utilized in the specified end use plant engaged in common specified end use of the successful bidder or its subsidiary company. 3. Utilisation of coal is permitted in accordance with Clause 5.7 of the Tender Document. 4. For the purpose of Tender Process, the Bidder has the flexibility to specify EUP. In this case, if the Bidder specifies a particular Unit as specified EUP, then utilisation of coal for any other specified EUP or unit in this case shall be permitted in accordance with Clause 5.7.1 of the Tender Document. The Central Government needs to be intimated prior to such an arrangement. 5. No. In accordance with Rule 20 of the Rules, coal can be utilized in the specified end use plant engaged in common specified end use of the successful bidder or its subsidiary company.

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S. No. Query Response 8 Clause 5.1.7

Bidders are also encouraged to mine at an accelerated rate….. 1. Producing more than 85% coal requirement is permitted by this clause?? 2. In case of increase in plant capacity (expansion of project/ addition of new units to the same end use plant), with resultant increase in coal demand, will the mine allottee be entitled to increase coal production to meet the increased coal demand?? 3. Will coal linkages be necessarily granted in case of increased production and exhaustion of coal reserve? 4. What are the incentives for a bidder to accelerate coal production? 5. Would additional coal production be subject to 150% of annual requirement based on 30 years Life of Mine? 6. Is the additional coal produced necessarily required to be sold back to CIL, or can the capacity of the end‐use plant be increased accordingly as well?

Bidders are obliged to extract coal in accordance with the approved mine plan. Mine plan may be revised in accordance with clause 9.1.1 of Tender Document. Utilization of coal is permitted in accordance with Clause 5.7 of the Tender Document. Capacity of end use plant can be increased accordingly.

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S. No. Query Response 9 Clause 4.1.2 (b) Eligibility on the basis of Coal Requirement

Clause 9.1 Revision in Mine Plan Upon Allocation 1. Suppose the extractable remaining reserve of a mine is about 12 mt and remaining life of the said mine is about 12 years meaning yearly extractable coal is about 1 mtpa and the coal requirement of a bidder end use plant of 30 years is about 12 mt i.e. 0.40 mtpa. Whether, the said bidder is eligible to participate in the tender? 2. Annual Coal Requirement (ACR) of EUP – 3 MnTPA 150% of ACR taken over 30 years – 135 MnT The EUP is declared as successful bidder for two blocks as below: Block 1: Total Reserve – 45 MnT Peak Production as per Mine Plan – 3 MnT Block 2: Total Reserve – 45 MnT Peak Production as per Mine Plan – 3 MnT Please confirm that in this case, the mine plan of each block can be revised downward to 1.5 MnTPA so that the mine meets the coal requirement for the period of 30 years. 3. Revision of mine plan is allowed only if Bidder intends to increase the coal extraction; Is there any option to reduce the extraction after signing of CMDPA based on actual gee‐mining conditions encountered on ground? 4. In case a Successful Bidder after being handed over the coal mine is unable to utilize the coal for an interim period, there should be a provision that allows the Successful Bidder from revising the mining plan downwards too. 5. Revision in mining plan with lower PRC may be allowed to the successful bidder, if the net extractable reserve in the revised mining plan is more.

1. In such a case, the bidder shall be eligible to participate in the Tender Process. Only upward revision in mine plan upon allocation is allowed for extraction of more coal, in accordance with the provisions of Applicable Law and Agreement. However, utilisation of coal shall be permitted in accordance with Clause 5.7 of the Tender Document.

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S. No. Query Response 10 Clause 4.1.2 (b) Eligibility on the basis of Coal Requirement

1. Disproportionate coal reserve & Mine capacity: In given coal mine, if capacity of mine is 60 Million Ton whereas annual capacity of Mine as per approved Mining Plan is 1.2 Million Ton per annum hence whether bidder should bid for 36 Million Ton (1.2 x 30) or for whole 60 Million Ton. In case of 60 Million Ton under what arrangement he shall be allowed to mine balance 24 Million Ton coal. 2. In case of Gare Palma IV/7 Mine where total extractable reserve shown as 56.62 mt (Phase – I 31.05 mt in first 30 years and Phase – II 25.57 mt and PRC is 1.2 MTPA: (a) In 30 years as per PRC, it can produce total 36 Million Ton coal in a year. Under these circumstances whether he shall bid for 56.62 Million Ton or up to the extent of 36 Million Ton only. (b) In 1st phase extractable reserve is 31.05 Million Ton in first 30 years in that case whether extraction against phase – II will also be permitted simultaneously or it shall be allowed only after completion of phase – I only. (c) Whether phase – I & Phase – II can be considered separately and accordingly bid for same may be called upon so that coal production against phase – I & phase – II can be made simultaneously by two successful bidders for the same. 3. What assurance on the actual reserves shall be provided by the Government? What if actual reserves are much lower than the details as per dossier shared by Government? What assurance on the actual reserves shall be provided by the Government? What if actual reserves are much lower than the details as per dossier shared by Government? If a producing coal block is awarded, how would the actual reserves extracted till date be assessed and assured by the Government?

1. As per Clause 4.1.2 (b) of the Tender Document, in order to be eligible to bid for a Coal Mine, Extractable Reserves of the Coal Mine should not exceed 150% of the annual coal requirementof the Specified EUP taken over a period of 30 years. If extractable reserves are higher than such requirement, the Bidder may explore the option of forming a joint‐venture. Otherwise, the Bidder is not eligible to bid for such mines, in accordance with Clause 4.1.2 (b). 2. Eligibility on the basis of coal requirement shall be as per Clause 4.1.2 (b) of the Tender Document. Please calculate the coal requirement of specified EUP first, to determine eligibility. Extraction shall be permitted as per approved mining plan or the revised mining plan, if any. Revision of mine plan for extraction of more coal shall be permitted in accordance with clause 9.1.1 of the Tender Document. 3. Geological Report and Mining Plan as submitted by the prior allottee has been uploaded as part of the Tender Document of each mine. However, Mine Dossier of the Coal Mine is being provided only as a preliminary reference document by way of assistance to the Bidders who are expected to carry out their own surveys, investigations and other detailed examination of the Coal Mine before submitting their Bids. The balance extractable reserve figures are given for the purpose of eligibility determination only and no warranty is made either explicit or implied with respect to the actual reserves which the Successful Bidder may be able to extract. The bidders are encouraged to undertake necessary due diligence to form their opinion on the same.

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S. No. Query Response 11 Whether either linkage order or application for coal linkage is essential along with EUP? Or Merely operating EUP i.e.

specified end use plant but does not having coal linkage / Application will also be eligible? For example: A company is having one operational plant (unit – I) for which he has applied coal linkage and one more plant under erection but not applied for coal linkage of that plant (unit – II) then it is eligible to bid for unit I & II both or only for unit – I ?

A company engaged in specified end‐use is eligible to bid in the auction process in accordance with the Tender Document. Coal linkage order/ application is not an essential requirement.

12 Change in configuration of plant capacity shall be allowed: e.g. Coal linkage application for 2 x 350 TPD & 1 x 500 TPD Sponge Iron Plant which comes total 1200 TPD, whether may be considered as 2 x 600 TPD for Sponge Iron Plant or not.

As per Clause 4.1.2 (e), total project cost and expenditure incurred for each unit is required to be certified by the secured creditor or statutory auditor of the Bidder, as the case may be. Configuration of the plant is required to be inline with the certificate.

13 1. “Specified End Use Plant” shall mean a plant of the Bidder or each of the JV Partners (in case the Bidder is a joint venture company) engaged in the Specified End Use. It is clarified that for the purpose of this clause, captive power plant with cement unit/iron & steel unit shall be considered as a single EUP, wherever applicable. 2. The clarification is required to ascertain eligibility and requirement for a specified end use. Quality of coal in different coal blocks is different and suitable for certain specific usage for most optimal utilization. Hence, considering CPP with cement/iron & steel unit as single EUP will allow judicious use of coal. This is also necessary as in an integrated plant/project; companies do not maintain separate statutory books of account for main plant (cement/iron & steel) and CPP. 3. We are having a 1 Million Ton Coal Washery at Talcher in Odisha. As Government of India has invited bids for E‐auction of coal mines, we want to know whether in terms of coal mines (Special provisions) or second ordinance 2014 clause 3(G) are we also eligible for bidding? If yes, under what category? 4. Whether consumption of power by a subsidiary/ associate of owner of such power plant be considered under the definition of CPP?

Specified end use, Specified end use plant and utilization of coal shall be in accordance with the Tender Document. Washery is not a specified end use for the purpose of this Tender Document. CPP shall be as defined under Electricity Rules 2005.

14 Clause 4.1.1 and Rule 10(4)(d)(iii) of the Rules capacity of the specified end use project shall be in proportion to the capacity of the Schedule II coal mine or Schedule III coal mine… Kindly clarify can a company combine and bid for requirement of more than one EUP for one block? In such case can the quantity of coal to be supplied to each such EUP be decided after emerging as Preferred Bidder?

A company can apply on the basis of multiple EUPs provided the extractable reserves of the coal mine does not exceed 150% of the combined coal requirement of the EUPs, in accordance with Clause 4.1.2 (b) of the Tender Document.

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“Specified End Use Plant” shall mean a plant of the Bidder or each of the JV Partners (in case the Bidder is a joint venture company)… Can a single unit/phase in a plant/ project be considered as an EUP or the same shall be defined on the basis of financial closure or some other method? (A Bidder should be given flexibility in selecting units or phases through which it wants to Bid as a few of its units may have linkage and a few may not. His risks and returns associated with a unit with linakge would be different than that of a unit without linkage.) Also can two plants at different locations of a single company be considered a single EUP?

Bidder have the flexibility of specifying the EUP, subject to Clause 1.1.32 and Clause 4.1 of the Tender Document

16 Clause 4.1.2 (d) With respect to one Specified End Use Plant only one Bid may be submitted for the Coal Mine, either individually or as a part of joint‐venture, either directly or indirectly. 1. Does that mean that a Bidder having multiple EUPs can submit multiple Bids for the same Block? In the Approach Paper it was clearly stated that "No Bidder (including its Affiliates) shall submit more than one Bid for any Coal Mine" However, the same is missing in Tender Document This clause is essential to ensure that each Bidder puts in his best quote for the best suited EUP in the First Stage while quoting Initial Price Offer. With only 50% of Qualified Bidders being allowed to participate in electronic auction, a bidder having multiple EUPs or Units or Phases shall have more room to play. a.No Bidder (including its Affiliates) shall submit more than 1 (one) Bid for any Coal Mine. b. A Bidder (including its affiliates) bidding individually or as a shareholder of a Joint Venture Company shall not be entitled to submit another Bid either individually or as a shareholder of any other Joint Venture Company, for the same End Use Plant (s), in the same Bid." 2. The same EUP must not be represented differently. One EUP can be represented by a single entity (Company/JV) for a particular mine in a single manner. 3. If there is a company XYZ Ltd. This company has an Affiliate due to common parent named MQN Ltd. Can XYZ Ltd. and MQN Ltd. submit separate technical bids for the same mine?

1. A Bidder having multiple EUPs can submit separate bids for a Coal Mine for each EUP. In such a case, the Bidder need to register on MSTC website for each of the EUP with separate DSC and purchase the Tender Document of respective mine(s) which it intends to bid for against the specific EUP. Thereafter, each EUP will be treated as separate bidding entity. 2. Refer Clause 4.1.2 (d) of the Tender Document 3. Yes. However, not for the same specified EUP.

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S. No. Query Response 17 1. Can the parent company include affiliates and subsidiaries plants as End use plants including the Parent company’s

plant and bid? 2. The Rule 20 permits utilization of coal for common specified end‐use project of a subsidiary of the bidder / allottee. However, the rules are silent about considering the end‐use requirement of a subsidiary company of the bidder for calculation of coal requirement for eligibility. There is no logic for forming a joint venture between the holding company and subsidiary company (particularly for wholly owned subsidiary) for joint bidding. The clarification / amendment will avoid confusion / issues of interpretation.

The ownership of the specified EUP should lie with the Bidder. Alternatively, a JV company may be formed between the parent company and its affiliates or subsidiaries, in accordance with the Tender Document.

18 The Company has two running EUPs with installed production capacity of 2mt and 3.6 mt of cement. Both the unit has different TIN numbers but Company has only one PAN number. At the time of registration we wanted to have two registrations for each EUP but because of Single PAN Number of the Company second registration has not been allowed. In the circumstances we have following quarries 1. Can we bid for two coal block for each EUP separately? 2. Can we amend the comments portion of the registration documents as we had mentioned only one EUP in the said comments portion? 3. Is it the case that one Company can bid for only one block for total requirement of coal required for combined capacity of both the EUPs.

1. Yes, the Bidder can bid for two coal blocks for the EUPs separately. Please refer 10.2 Annexure II for Technical Details w.r.t submission of bids. 2. Multiple registrations are permissible against single PAN. Bidder has the choice to register separately for its different EUPs and then bid separately or can club all the EUPs and bid as a single entity. The comment portion cannot be edited by the bidder. The bidder may send a request mail to [email protected] mentioning the buyer reference number for effecting the change. 3. One Bidder may bid for more than one coal block for an EUP subject to the eligibility conditions mentioned in Clause 4.1 of the Tender Document.

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S. No. Query Response 19 Clause 5.2 Joint Venture Company as the Bidder

1. If two or more companies decide to bid together as a Joint Venture, whether the JV company has to be incorporated before submission of the bid or the JV can bid on the basis of a Memorandum of Understanding/ Consortium Agreement entered into between the JV Partners and the JV company can be incorporated subsequent to the JV being qualified as the Successful Bidder? 2. In case the JV Partners can bid on the basis of a MoU/Consortium Agreement, is there any prescribed format for such MoU/Consortium Agreement? 3. Also, what will be the process in terms of registration for the bid process and for purchase of RfPs? Can a single lead member of the JV/Consortium act on behalf of the JV and register itself to perform all bidding related activities for the purpose of the auction process? 4. In case of Joint Venture company, can a member of the JV company purchase the Tender Documents instead of the Joint Venture Company.A JV Partner shall be allowed to purchase the Tender Documents, if the JV Company is under incorporation. The Tender Documents may only be used by the purchasing company or a JV Company of which the Purchasing company is a member. 5. Whether the tender document purchased from MSTC by the parent company/ one of the JV Partners”), can be used for submission of bid by the subsidiary company/the JV Company. OR The tender document should be purchase only by and in the name of the entity (Affiliate/ Subsidiary Company or JV Partnership) which will bid for the mine. 6. It is found that a company after downloading Tender Document for a coal mine by paying Rs. 5 lakhs, can only assess its eligibility or capacity to participate in auction for that particular coal mine and hence may opt for participating through a JV. Hence, subsequently JV Companies are being formed, in which the companies which purchasing the Tender Documents are JV Partners.

The JV company is required to be incorporated prior to registration for the Tender Process. As per Clause 3 of the Tender Document, Bidders are required to register on MSTC website and purchase Tender Document. The tender document should be purchased only by and in the name of the entity (Affiliate/ Subsidiary Company or JV Company) which will bid for the mine.

20 1. Would a JV of two players having different end use plants (EUP) in the same sector be allowed to bid together? 2. In case of different end use segments within same EUP (for eg. Steel plant with a CPP power plant) can these be considered as multiple EUPs? 3. Can two EUPs from one company be combined for bidding for a single coal mine? 4. Capacity of EUP in steel segment – would any supporting documents be required to support the capacity or this would be based on the submissions by the company?

1. Yes, in accordance with Clause 4.1 of the Tender Document 2. Specified EUP shall be as per Clause 1.1.32 of the Tender Document 3. Yes, in accordance with Clause 4.1 of the Tender Document 4. To be mentioned in the total project cost certificate issued by the secured creditors or statutory auditor of the Bidder, as the case may be.

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S. No. Query Response 21 Clause 4.1.2 (c)

Additional Eligibility Conditions for Bidders which is a Joint Venture 1. How to define “economic interest” in JV in the matter of investment and profit sharing? 2. Please clarify if economic interest and voting rights are required to be same in a block or can be different subject to minimum of 20% individually. e.g. Company A and B bids in JV. Can Company A and B have 50‐50 shareholding while economic rights (i.e. coal offtake rights) of 20% ‐80%?

As per Tender Document

22 Clause 5.3.1 Change in Control or Transfer subsequent to determination of successful bidder Change of Control is very widely defined in the bid document and will create many issues. The restriction should apply on the transfer of mine in isolation without the EUP. In case EUP along with mine is subjected to change of control, there should not be any restriction since having won the mines in auction process, the allotee should have the freedom to transfer such EUP along with Mine. 1. Control must be defined separately for application of this clause. 2. There should not be any restriction of transfer of EUP +mine. Restriction should be applicable only if mine is transferred without EUP. 3. It is not clear as to how a Successful Bidder can remain eligible/compliant after change in control or transfer of the specified end use plant along with rights in relation to the coal mine, especially where one bidder owns more than one EUP and transfers one of these. The manner in which this provision is worded may lead to confusion and disputes.

As per Clause 5.3.1 of the Tender Document. Change in Control shall be permissible if such change in Control does not result in Successful Bidder being non‐complaint with any of the Eligibility Conditions or the transferee is also compliant with the Eligibility Conditions as the case may be.

23 Clause 1.1.13 “Control” shall include the right to appoint majority of the directors or to control the management or policy decisions … There is no specific equity holding percentage specified as has been done in case of “Significant influence” (defined in case of associate). (No mention of percentage will lead to confusion and subjectivity. )


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S. No. Query Response 24 Clause 4.1.1 and 4.1.2 (e) Certification of Total Project Cost & Expenditure

1. What constitute a Project Cost? Whether excise duty which is CENVATABLE is a part of project cost? Does project cost includes margin money for working capital? Does project cost includes "contingencies". 2. Is cost overrun to be taken in consideration. If say project is 80% completed, but due to cost & time over run, actual expenditure may be more than the total project cost. How this to be accounted for. 3.Will it be sufficient to have a single certificate issued by bidder mentioning both total cost of the End Use Project and expenditure incurred till 31.12.2014 and duly certified by the Statutory Auditor, rather than two different certificates‐one for total project cost and other for expenditure till 31‐12‐2014. 4. Whether the certificate confirming the actual expenditure incurred is required for FULLY COMPLETED end use plants which are already under operation. The maximum period for maintaining records required under various Applicable Laws is upto 8 years. Hence, in case plants are older than 08 years, records may not be available. Further in case of plants already in operation, such Project Cost certificate becomes irrelevant. 5. Since bids are due in January, December documents and figures may not be available by the time of bid preparation and hence if Bidder is qualifying based on expenditure incurred by any prior date should be considered. 6. Normally subsequent phase construction starts only after completion of first phase. Allowing other phases will lead to misrepresentation. a company eligible to bid for any Schedule II coal mine under sub‐section (3) of Section 4 of the Ordinance shall have incurred an expenditure of not less than eighty per cent of the total project cost of the unit or phase of the specified end use plant for which the company is bidding 7. Is the certificate for the end use project is necessary if the loan for such project funded are fully repaid. In such case can the bidder submit a certificate from its statutory auditor confirming the expenditure incurred. We understand that the actual expenditure incurred on the EUP shall be certified by the Statutory Auditor is fullfil the requirement. Please comment if our understanding is correct.

1. Total project cost shall be as certified by the secured creditors i.e. bank(s)/FI(s) who have financed such project or statutory auditors of the Bidder, as the case may be, in accordance with the clause 4.1.2 (e). 2. Total project cost shall be as per the last appraised project cost by secured creditor i.e. bank(s)/FI(s) who have financed such project, in case it is financed by creditors. Otherwise, Total Project Cost shall be the latest assessed cost as certified by the statutory auditors of the Bidders. 3. As per clause 4.1.2 (e) of the Tender Document, while the Total Project Cost is required to be certified by secured creditors i.e. bank(s)/FI(s) who have financed such project, the expenditure incurred is required to be certified by the statutory auditor of the Bidder. In case the Specified End Use Plant has not been financed by creditors, then Total Project Cost is required to be certified by the statutory auditors of the Bidder. Only in such case, a single certificate for Total Project Cost and expenditure incurred may be submitted. 4. For operational EUPs, a certificate from statutory auditor confirming the EUP is operational and its capacity shall be sufficient. In such a case, the project cost and expenditure certificates are not required to be submitted. 5. Eligibility condition as per Clause 4.1 of the Tender Document, met on a prior date shall also be considered. 6. As per Clause 4.1.1 of the Tender Document

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S. No. Query Response 25 Clause 6.1

The Bidder shall furnish... having a validity period of not less than 240 (two hundred and forty) days from the Bid Due Date, inclusive of a claim period of 60 (sixty) days.... 1. From this clause, we understand that Bid security is required to be valid for a period of 180 days with a further claim period of 60 days (i.e. total 240 days claim period). Kindly clarify if this understanding is correct. 2. Extension of bid security may not be required. validity period of not less than 240 (two hundred and forty) days from the Bid Due Date, inclusive of a claim period of 60 (sixty) days. 3. It may be difficult to get BG from a bank at Delhi. Instead, will it not suffice, if it is mentioned in the BG that BG is revocable at any Branch in Delhi. 4. The bid security should not be forfeited for non‐responsive bid because of not meeting the qualification criteria.

1. Yes 2‐4 As per Tender Document

26 Annexure VIII Bank Guarantee for Bid Security 1. Kindly provide name and address of Beneficiary. 2. Any notice by way of request, demand or otherwise hereunder shall be sufficiently given or made if addressed to the Bank and sent by courier or by registered mail to the Bank at the address set forth herein, on receipt of the same. Security can be encashed only upon Bank receiving the notice. This is Bank’s requirement. 3. Suggested additional point 13. Notwithstanding anything contrary contained in any law for the time being in force or banking practice, this guarantee shall not be assignable or transferable by the beneficiary. Notice or invocation by any person such as assignee, transferee or agent of beneficiary shall not be entertained by the Bank. Any invocation of guarantee can be made only by the beneficiary directly. NOTWITHSTANDING ANYTHING CONTAINED HEREIN ABOVE : (i) Our liability under this guarantee shall not exceed Rs. _________. (ii) This Bank Guarantee shall be valid up to _____________. (iii) We are liable to pay the guaranteed amount or any part thereof under this Bank Guarantee only if you serve upon us a written claim on demand on or before ___________. This is mandatory requirement suggested by Bank in the BG format without which Banks would not issue BG. This text only summarises Bank’s liability without changing any material provision of the BG.

1. The Nominated Authority World Trade Tower, Ground Floor Barakhamba Lane New Delhi ‐ 110001 2‐3. As per Tender Document

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S. No. Query Response 27 Clause 7.1 Performance Security

1. The period for performance security will be given in the Agreement paper only. 2. Mine plan variation of +/‐20% of the annual capacity should be allowed considering geological surprises and other uncertainties. We request that delay in obtaining statutory clearances, mining lease and other approvals should not be considered as a lapse while levying penalty for delay in development or as a reason for de‐allocation. 3. The Performance Security shall be an amount which aggregate of (a)one year royalty payable to respective State Government w.r.t to coal mine in the year 2014‐2015. The Production as envisaged in the year 2014‐2015 should be fixed for royalty as the agreement will be executed by March 2015. How will the amount be decided at the time of signing the Agreement. 4. The Performance Security will become too high (almost double the amount of Annual Royalty).It should be either of these two. ‐ The purpose of imposing Performance Security shall not such that it prevents even the genuine players to participate. 5. Providing timely clearances should be included as a Conditions Precedent for the Government in the Coal Mine Development and Production Agreement One of the key instances where the performance security could be appropriated by the Government would be delay in development of the coal block by the preferred bidder, attributing the delay to the bidder. However, in many of the cases, the delay could be due to delay in provision of statutory approvals and clearances by the Government. Since the block would be awarded through a transparent bidding process conducted by the Government, the Government should ensure that all approvals and clearances are provided in a timely fashion. 6. The quantity of coal extracted in an average year would be less than the annual peak rated capacity, the Performance Security should hence be with regard to the average annual production. 7. The proposed methodology based on shortfall in production for the schedule II coal blocks should apply to those coal blocks which have achieved the peak rated capacity. For the schedule II coal blocks which have not yet achieved the peak rated capacity, the proposed methodology should be applied based on the progressive production plan to be confirmed and agreed with the successful bidder and incorporated in the agreement to be executed with the Nominated Authority. 8. There is supposed to be lean period in UG project development, when this block would not produce coal. For such period would the project proponent be liable to pay for any penalty?

As per Tender Document and as provided in the Agreement.

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S. No. Query Response 28 Annexure IX

Intimation of date by which the Coal Mine Development and Production Agreement would be available to the Bidders as bidders may seek clarification on CMDPA as well

To be provided shortly

29 Clause 5.7.1 Any middlings or washery rejects generated from the Coal Mine may be sold… 1. It is not clear how the eligibility criteria may be applied. Allowing selling of washery rejects may distort the level playing field while bidding. 2. Rejects and Middling will be allowed to be sold in the open market subject to CCO approval. No clarification of terms on which such approval will be provided. Further, please specify the royalty and bid premium that would be payable on such rejects/middlings

Specifics as provided in the Agreement.

30 Power blocks having less than 50MT remaining mineable reserves should be allocated to the non‐regulated players (CPP/Cement/Steel & Iron) It may be noted that none of the blocks identified for non‐regulated enduse meet the criteria of large CPPs interms of quality of coal. We request that few of the blocks identified for power enduse or additional blocks from Schedule I which meet the criteria of large CPPs, be identified for non‐regulated sector. Alternately,a part capacity of the coal blocks identified for power enduse may be made available for large CPPs to bid under the forward auction. Large CPPs may be considered eligible on the same grounds as unregulated IPPs

As per Order No. 13016/9/2014‐CA‐III dated Dec 18, 2014 issued by Ministry of Coal.

31 Clause 2.2.2 The Bidders are also required to take note that Ordinance is subject to Article 123 of the Constitution of India… 1. Bidders are submitting bids considering current law and bidding framework. In case of change in law, if project is adversely impacted, same should be compensated by adjusting bid price. 2. In case the current Ordinance is converted into legislation with material changes post completion of bidding (like change in list of mines for each end use segment), how will this be handled for bidders who have already won the blocks. What is the impact of delay or non‐conversion into legislation?

All actions taken as per the Ordinance will remain valid in law.

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S. No. Query Response 32 Clause 1.1.15 Final Price Offer

Final price bid offer has to be submitted based on certain geological information provided along with the tender document. In mining we always find geological surprises in respect of fault, thickness of seam, stripping ratio washouts and other features. Mine specific or site specific geological variations during actual mine development is not considered in the given provision. Please incorporate suitable clause to deal with such geological surprises to insulate the coal block allottee from any adverse situation.


33 1. What about the Representation / Warranty of the data provided by the prior allottee? Authority must provide a mechanism for recourse available to the successful bidder in case the prior allottee has misrepresented or has submitted the fabricated / false data. The mine is operating and prior allottee has taken out coal in past, there should be some warranty / certification / validation by the relevant authority for this production data submitted to the bidders by the prior allottee. There may be a situation where there could be a variance in the extractable coal left to the successful bidder. 2. What about the Representation / Warranty for the compliances or no‐statutory violations, during the possession of the licenses period of the mine?

Please refer to the Important Notice given in the Tender Document.

34 The following needs to be provided for (1)Force Majeure conditions where the block owner will not be account able for production of coal for any disruption in production arising out of force majeure conditions. (2) There are in many cases various mine development works were co‐ordination of several agencies not under the control of bidder would be required. In such conditions. There could be failures leading to disruption in coal production. In such situation the bidder shall not be held accountable and it shall be resolved in consultation with the concerned agencies, bidders and MOC. For example – (i) the diversion of state / national highways (ii) high‐tension power lines (iii) surface features belonging to state (iv) diversion of canal / major drains etc. cannot be unilaterally done by the bidder Force Majeure conditions are beyond The Control of bidder and therefore no responsibility or damage should lie with him. Such conditions are beyond the control of bidder and therefore no responsibility or damage should lie with him

As per the Agreement to be provided.

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S. No. Query Response 35 1. The tender document does not specify fixed amount and amount of performance security payable by successful bidder. In the

absence of this it will be difficult to work out the cost of production. 2. Royalty will be payable on CIL notified or CIL notified price + Bid price? 3. It is suggested that payment to be made by the bidder on account of Royalty as well as other taxes and duties may please be specified. 4. Since the final price offer for each mine is available, the royalty payment should be delinked from the CIL notified price and should be linked to the final price offer of each mine which is escalated as per the terms of the tender document. 5. The definition of transaction expenses as per clause 1.1.39 shall mean a fixed amount of INR 16.85 lacs towards cost & expenses incurred by nominated authority for conduct of auction process. Please clarify, whether the same shall be divided by 24 coal mine OR it shall be payable for each coal mine irrespective of their extractable reserve. 6. Whether only successful bidder would be required to pay the Transaction Expense.Transaction Expense should be shared be all prospective Bidders . 7. Since a period of 30 years has been considered for calculation of coal requirement, the Upfront Payment of 10% shall be considerably high. Upfront payment should be 5% instead of the proposed 10% of Intrinsic Value. 8. Will stamp duty be payable by the Successful Bidder upon transfer of land? 9. Fixed amount towards land and mine infra to be payable after physical verification, diligence, impairment test? 10. Technical details of mine infrastructures like capacity, make, model, equipment supplier, contract executed with equipment supplier, AMC, Technical drawings, present condition, spares availability, balance useful life etc. and Nominated authority shall provide confirmation of valuation of such infrastructure to the Bidders. 11. The capital expenditure includes following: i) Forest land compensation and compensatory afforestation cost ii) Revenue land purchased/acquisition cost in the lease area iii) Geological Report cost iv) Infrastructure civil construction cost of the area Items (i), (ii) & (iii) are not depreciated and kept at its cost value. Forest land after mining is taken back by Forest department and value is Zero to the operator. Similarly compensatory afforestation charge, Geological Report has Zero value after the mine is exhausted. As per mining lease deed the Revenue land after completion of the mine is given back to state and its original owners. The civil construction & facilities created also has Zero value. All the above expenses are made for extraction of mineable/extractable coal and hence it should be pro‐rata basis on the total mineable/extractable coal and should be proportionately borne by previous allottee and new successful bidder on the basis of total coal extracted till 31.3.2015 by previous allottee and balance amount to be borne by new successful bidder 12. Investment made by the Pre‐allotee for the purpose of land. Please note that when existing operating mine already used certain part of land and extracted coal by the existing Pre‐allotee why successful Bidder shall pay for land already used by the Pre‐allotee.

Details of fixed amount payable shall be provided shortly. Fixed amount shall be payable prior to issuance of Vesting Order. The Bidder may carry out site visit and request for inspection of land documents in accordance with the Tender Document. Performance Security shall be calculated in accordance with Clause 7.1.1 of the Tender Document. Royalty shall be payable as per applicable guidelines of Central Government i.e. CIL notified price. Currently, it is Notification No. 349 E dated May 10, 2012. Transaction expense of Rs. 16.85 lacs is payable for each coal mine. Transaction expense shall be payable by the Successful Bidder. Upfront payment amount has been provided in Clause 3.9 of the Tender Document of the respective coal mine. Stamp duty shall be payable as per applicable law.

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S. No. Query Response 36 Mine wise EMD details, reserve price, extractable reserve, PRC and Intrinsic value.

1. Without knowing the reserve price of each coal block and the compensation to be paid to prior allottee, sponge iron manufacturers cannot form joint ventures. Earlier it was decided to give a free access to everyone to look at the reserve price and the compensation amount, but that has not yet been displayed. 2. Part‐B of brief note (Mine summary) should include the details of Upfront Amount of each mine as this is one of the important criteria to decide upon the selection of mine before making non‐refundable payment of Rs. 5 lakh for tender documents.

Bid Security, Floor Price & Additional Reserve Price (as applicable), and Upfront Amount is specified in the Tender Document of respective mine. For details of extractable reserves and PRC, mine summary (available free of cost) may be referred to as uploaded on www.mstcecommerce.com. For accessing other info and mine documents, payment of Rs. 5 lakh is required to be made per mine.

37 Clause 1.1.40 Upfront Amount Tax treatment of the upfront payment will have impact on valuation and hence should be clarified.

As per prevailing tax laws.

38 Clause 3.3.2 (g) Payments by Successful Bidder 1. Please clarify whether the soft costs incurred by the prior allottee (Interest during construction, pre‐operative expenses, etc) are payable by the successful bidder (or) they are already considered as part of the “Fixed Amount” to be payable by successful bidder. 2. Reimbusement to Prior Allottee (Current ordinance does not provide for the reimbursement of ‐ cost incurred towards preparation of geological report, cost of obtaining all statutory licenses, permits, permissions, approvals, clearances or consents relevant to the mining operations, borne by the Prior Allottee. Same should be reimbursed. The Ordinance and Rules will have to be amended to include these as part of Mine Infrastructure or separate provision has to be included so as to reimburse these expenses to prior allottee.) Such Fixed Amount (excluding Transaction Expense) would be paid to the Prior Allottee. 3. The Fixed Amount as payable shall be payable in four equal quarterly instalments within twelve months from the date on which the first instalment id due as per the clause 3.3.2 and 3.8, along with reasonable interest. Giving that the successful bidder will be taking over an operational mine, it will have to take up significant financial burden. Payment to Prior Allottee should be made in instalments. If need be, the same may be backed by Bank Guarantee.

1. Refer Clause 3.3.2 (g) (ii) for definition of Fixed Amount 2. Kindly refer to Rule 8(4). The list provided is illustrative and not exhaustive as is clear from the phrase "inter‐alia". 3. As per Tender Document

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S. No. Query Response 39 1. Please provide details and methodology on how the upfront amount was calculated.

2. For calculation of Intrinsic Value and Upfront payment, please clarify whether the notified CIL price shall be taken for ROM or Steam. 3. Financial model for calculation of Intrinsic Value along with major underlying assumptions and discount rate used be provided. 4.Detailed calculation for deriving the Floor Price of a particular coal mine may be included in the Tender Document.

Methodology for determination of Upfront Amount and Floor Price for auction of coal mines has been published via notification No. 13016/9/2014‐CA‐III dated Dec 26, 2014 by Ministry of Coal. The same may be accessed at the website of Ministry of Coal.

40 Please confirm that the amount transferred in the escrow account shall be transferred to Successful Bidder. This is necessary for discharging the statutory liability.

As per the Ordinance and the Rules

41 10.2 Annexure II ‐ Technical Details with respect to electronic auction The Initial Price Offer shall be evaluated in the manner provided in the Tender Document… The RFP needs to provide clarity on the specificity of the bid parameter – whether it is ROM cost of mining, does it include crushing, sizing, loading etc.? The RFP prescribes mining cost as the bid parameter? How will this be linked to the end pricing of the EUPs? The RFP does not provide any linkage.


42 10.3 Annexure III 1. Please specify name address to whom the document to be submitted. 2. Will it be sufficient to upload the following a. Calculation as per illustration given. b. Certificate of expenditure till 31.12.2014 and total project cost by bidder duly certified by Statutory Auditor. c. Self certification for specific coal consumption at 85% of the capacity. d. 10.4 Annexure IV duly signed. or we should also up load Annexures V, VI & VIII, originals of which are being submitted in hard copy separately. Is their any other document to be uploaded with technical bid?

1. The documents required to be submitted offline shall be submitted at the following address: The Nominated Authority World Trade Tower, Ground Floor Barakhamba Lane New Delhi ‐ 110001 2. Documents submitted offline are also required to be scanned and uploaded. In the event of any discrepancy between the scanned document(s) and physical document(s), the physical document(s) shall prevail.

43 10.5 Annexure V Power of Attorney Is it necessary to take Power of Attorney in respect of each of coal mine separately for which bid is being submitted or it may suffice to mention names of all the coal mines in Power of Attorney for which party is submitting the bids? This would obviate issue of multiple Power of Attorney.

Power of Attorney is required to be submitted for each coal mine separately as part of Technical Bid.

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S. No. Query Response 44 Annexure II Technical Details with respect to electronic auction

What will be the scheduled close time for the electronic auction process? In absence of any long stop time, there is a chance that auction process can run over multiple days.

Scheduled start and close time of the e‐auction process shall be intimated subsequently. It is possible that the auction may run over multiple days.

45 1. It may be clarified Whether all the mines will be auctioned simultaneously at the same time or the auction will be conducted sequentially mine after mine i.e. auction of second mine will be conducted after the auction for the first mine is closed and so on? 2. Since there are only a maximum of five technically qualified bidders for the financial bid stage and the number of blocks for power sector under reverse auction is less and the time period for conduct of electronic auction (financial bid) is spread over 9 days, it is requested that at least for the power sector blocks there be electronic auction of only one block at a time. 3. In the pre‐bid, it was clarified that the e‐auction will be conducted for each block as per schedule provided in advance and in a sequential manner. Kindly clarify if there will be a time limit for completion of auction and consequence of not completion within schedule? Further, if auction continues for prolonged duration, then will auction for multiple block be run parallel or will be started only after auction for a particular block is completed? In case of parallel auction, can use be provided with multiple user ids to ensure no issues on parallel auction. Kindly also provide detailed guidelines and demo for financial bidding.

E‐auction (Financial Bid for Final Price Offer) shall be conducted sequentially. However, two or more coal mines for different specified end‐uses may be auctioned simultaneously. Demo e‐auction shall be conducted and schedule for the same shall be provided.

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S. No. Query Response 46 Clause 3.3.2 (e) Preferred Bidder not to become successful bidder in certain cases

1. The typical scenarios in which a Preferred Bidder may not be considered as Successful Bidder should be clarified with example. In case a Preferred Bidder for a particular coal block is also preferred bidder for other block but as per eligibility condition for maximum extractable reserve of 150% of requirement can hold only one block, how the same would be decided? Will preferred bidder be given option to choose block it would like to retain among several won? At which point of time such choice need to be made. Can Preferred Bidder add/replace EUPs (without changing bid entity constitution/control etc.) declared for any particular block it has won to continue to meet eligibility requirement of maximum extractable reserves. E.g. if Bidder A have 5 EUPs for which it has won 2 blocks against EUP 1, 2 and 3. Since, it won 2 blocks for same EUPs, can it replace declared EUPs with EUP 4 and 5 to continue t+C52o meet eligibility requirement. 2. It is clear than bidding will be a sequential process and If a bidder wons the bid for the block which has reserves less than the total requirement (@150 times of annual requirement spread over 30years) and in the next bid he again wins another block wherein the reserves are more than the requirement, then in such case the bidder shall be allowed to surrender the block with less reserves without any financial or legal repercussions like no forfeiture of Bid Security or any legal action against the bidder shall get implied.

1. Preferred Bidder not to become successful bidder in certain cases as per Clause 3.3.3 (e) Tender Document. 2. The responsibility of ensuring that the bidder does not place bids beyond its eligibility shall lie with the Bidder alongwith attendant consequences.

47 Clause 5.6.2 (b) & 5.6.3 the Bidder does not provide, within the time specified by the Nominated Authority, the supplemental information sought by the Nominated Authority for evaluation of the Bid. Nominated authority should provide sufficient time to submit additional information requested. Further, additional information requested can only be furnished if it is applicable and feasible to provide. Hence non‐compliance of this provision should not result in disqualification for 1 year but should be limited to only current auction for that specific coal mine. Records beyond 8 years are not required to be maintained under Applicable Law and hence any documents which are asked pertaining to certain timelines may not be feasible to produce.


48 Clause 3.3.2(b)(i) In the event that the total number of Technically Qualified Bidders is less than three then no Technically Qualified Bidder shall be considered to be Qualified Bidder(s). In the event the total number of technically qualified bidders for a block is less than three, then please clarify how the said block would be allocated

The Coal Mine may be subject to re‐auction or being granted to the custody of a Designated Custodian and the tender process may be annulled.

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S. No. Query Response 49 The dates for Demo e‐Auction by MSTC not mentioned in the Timelines

(This is to ensure that before the actual auction, bidders are well aware of the process and all technical glitches are smoothened out before the commencement of the actual e‐auction)

Shall be communicated shortly

50 Clause 3.3.2 1. Whether the Initial Price Offer submitted by all the bidders will be announced at the time of opening of Technical Bid? This will make the technical bids transparent and will avoid confusion. Details of initial price offer including name of bidder may be provided 2. Will the coal mine be offered to the next highest bidder, if the Preferred bidder withdraws its offer?

1. Based on ranking of Technically Qualified Bidders, Applicable Floor/Ceiling Price shall be announced, as the case may be. 2. No,Please refer to Clause 3.3.2 e of the Tender Document

51 1. In case a particular bidder quotes unrealistically low/ high quote during initial price offer just to distort competition and then does not participate in the e‐auction stage: how will this be taken care of? 2. Would a bidder who has quoted highest / lowest price in the Initial Price offer be bound to bid during auction or will he be allowed if the bidder doesn’t bid during the auction? If such a bidder withdraws or doesn’t participate, its’ price offer should not be considered for 2nd stage. Also if a bidder’s coal requirement has been met in a previous e‐auction round, it should not be allowed to participate in further e‐auction rounds and his initial price offers should not be considered for further e‐auction rounds. In such a case, the next qualified bidder’s initial price offer should be considered. 3. During the e‐auction stage, what happens in case of multiple bids at the minimum level?

1 & 2. A bidder is not allowed to withdraw its Bid after Bid Due Date. Refer Clause 5.12 of the Tender Document 3. E‐auction platform is designed in such a manner so that tie of final price offer is not permitted.

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S. No. Query Response 52 1. Suppose as an outcome of the bidding process, mines are won by players whose end‐use plants are located at large

distances. This would lead to sub‐optimal utilization of coal resources along with increased pressure on the freight rail infrastructure which is already saturated. 2. A mechanism to ensure that the projects allocated coal blocks earlier get level playing field to compete and secure the coal blocks should be put in place. Also, the bid structure should consider the matter in a manner that the projects don’t end up becoming stranded assets at the expense of benefitting imported coal based projects. It is requested that imported coal based plants may be restricted from bidding. 3. Prior allocattee should be one of the shortlisted bidders in the Technical qualification round. Earlier allocattee should be ascertained consideration for participation and selection. Allocatee might have incurred significant investment in coal transportation and planning EUP, and accordingly consideration in selection should be placed for this. Based on the allocated Coal block, the earlier allocatee would have located the EUP and it would be inefficient and uneconomic for the coal block to be utilised for other distant EUPs. Investments and location of EUP made by the earlier allocate in terms of infrastructure, transportation etc. should be given consideration and earlier allocate should be given preference in participation and selection for the block. 4. There shouldn't be any submission of initial price offer during technical bid. It is evident that Initial Price Offer submission will be inconsistent with the Rules which provide only for Electronic Auction. The Ordinance and Rules have not stipulated submission of Indicative Price Offer along with the Technical Bid and only E Auction process is prescribed. The CVC guidelines on the auction clearly state that all technically qualified bidders must get to participate in the E Auction. 5. Bid Due Date‐To + 60. Only 35 days have been provided for submission of Technical Bid and Initial Price Offer after issue of clarifications by NA. the time is inadequate to read and understand documents. 6. Conduct of Electronic Auction (Financial Bid) for the Qualified Bidders‐ 7 days after the Announcement of Qualified Bidders. Presently, only two days has been provided for Qualified Bidders to prepare for the E‐Auction. The same shall be increased to 7 days. 7. Modifications should be allowed upto 1400 Hrs on Bid Due Date

Tender Process shall be conducted in accordance with the Tender Document.

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S. No. Query Response 53 Please mention the details of paid and free of cost documents that are going to be shared with the bidders. Standard Tender Document and Mine

Summary of the mines being auctioned is available free of cost. Tender Document of a mine may be purchased upon payment of specified fee. Tender Document includes CMDPA, Mine Dossier, any addendum to the Tender Document and any other such document issued.

54 Why the Process of determination of Qualified Bidders has some ambiguity Going by description given in Clause and Illustration, there is discrepancy which results in ambiguity in determination of Qualified Bidders. Therefore the text is suggested as given in previous column. Further, it may so happen that in the process, there are multiple Bidders which are satisfying this criteria. For example, if there are ten Initial Price Offers with the pattern of: L1, L2, L3, L3, L4, L5, L5, L6, L6, L7. As per clause, the qualifying bidders are 6 (5+2‐1), i.e. considering only one of the two Bidders who are L5, which is not rational.


55 Why there is no Authority / contact person for day to day administrative issues regarding data pack issues faced by the bidders?

Bidders may submit their queries in accordance with the Tender Document

56 1. Since Tax Identification Number (TIN) is asked while registration and our plants are located in different states and having separate TIN numbers; do we need register each end use plant separately? 2. We understand that only one login ID is allowed for one organization (PAN No). Therefore, no two blocks intended for same end‐use will be auctioned simultaneously. Please confirm.

1. Choice is with the bidder. If the bidder wants to register separately for its different EUPs, it may do so with one PAN. The Bidder may note that in order to bid for one single mine through multiple EUPs (which is technically permissible), it needs to purchase the same Tender document multiple times against each registration. 2. One login id is allowed against one registration. A bidder can have multiple registrations and thus have multiple login ids.

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S. No. Query Response 57 3.(b) The competent authority of the Bidder shall be required to issue a Letter of Authority in favour of the Authorized

Contact Person (holder of Digital Signature Certificate) There may be two Contact Persons allowed. In absence of one Contact Person (for any unavoidable circumstances), the other may continue.

There is no provision in the system to have more than one authorized contact person for a bidder at a time. The bidder may get the authorized person changed with MSTC, if so needed. For this purpose, a request letter should be sent by the Competent Authority of the bidder to MSTC through email at [email protected]

58 Clause 1.1.12 Coal Mine It should be clarified what all areas/items are included in Coal Mine.

Refer definition of Schedule I Coal Mines in the Coal Mines (Special Provisions) Ordinance 2014

59 Clause 1.1.4 Applicable Law Are all relevant notifications/order with respect to bid will be available at website of coal mine auction? ( any internal order which affects the bidder need to be easy available at one place)

All relevant notifications are available at the MSTC's /Ministry of Coal website

60 Clause 3.7.6 The Nominated Authority shall not entertain any query or clarification from Bidders who fail to meet the Eligibility Conditions. The technical qualification cannot be pre‐judged for deciding eligibility.

This only refers to situation after opening of Technical Bids.

61 Clause 3.6.2 shall be eligible to make request for visit to the Coal Mine until the Bid Due Date. 1. Nominated Authority should arrange to plan for site visit before the scheduled date of pre‐bid meeting. In case, the site visit is after the date of pre‐bid meeting, the Nominated Authority should clarify additional queries from the bidders based on the site visit. 2. Will the bidders be allowed to carry out grade verification through sample check during site visit 3. In the event a Bidder takes a site visit, then Bidder shall be liable towards any loss or damages caused to site and/or Prior Allottee, on account of any act or omission of such Bidder. Either "acts or omission‟ are defined or this clause may be removed.This has very wide implications.

1. Request for site visit may be sent as per Tender Document. 2. Site visit shall be conducted in accordance with Clause 3.6 of the Tender Document. 3. As per Tender Documents

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S. No. Query Response 62 If any of the Mine Infrastructure is being retained by the Prior Allottee, the bidder must be made aware of such details.

(If the prior allottee has intended to retain the existing immovable infrastructure, he should be allowed to do the same so as to support the operation of existing EUP located near the pit.)

As per the Ordinance, mine infrastructure is included in the definition of Schedule I Coal Mine which shall be allocated. Therefore, a prior allottee cannot retain existing mine infrastructure.

63 Before the selection of the preferred Bidder and signing of Agreement, the nominated Authority should settle the boundary issues pertaining to the Block. This will facilitate hassle free grant of Mining Lease and signing of Lease Agreement.

This issue is under consideration of the Government.

64 Why there is no process provided for the transfer of ownership of Land and Mine Infrastructure? Please refer Definition of Schedule I Coal Mines in the Coal Mines (Special Provisions) Ordinance 2014. The vesting order shall be issued as per Section 8(4) of the Ordinance.

65 Is it mandatory for Bidder to absorb all of currently employed manpower or Bidder has choice to review required manpower/replace with own manpower

As per bidder's discretion

66 Please confirm the list of permits/ consents/approvals which will be transferred to Bidder. Also please confirm associated cost and process

As per the Ordinance and the Rules

67 What is the provision for the Bidder to conduct diligence 011 plant & machinery, mine infrastructure etc. being acquired with respect to their current usability


68 Clause 1.1.3 “Agreement” shall mean the Coal Mine Development and Production Agreement to be executed pursuant to Rule 3(5) of the Rules in substantially the same form as specified in Annexure IX. There is no such Rule 3(5) provided in Coal Mines (Special Provisions) Rules, 2014

To be read as Rule 13(5) of the Rules.

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Clarification is needed on what would be the entitlement of a Bidder, is it 150% of the annual requirement of Specified End Use Plant? Also, if coal is also to be utilized for any other End Use Plant of the bidder then how the entitlement amount would change ? (Definition of "entitlement" may kindly be provided)

A successful bidder is entitled for coal up to 150% of the annual coal requirement taken over a period of 30 years for the specified EUP, subject to extraction of coal in accordance with the approved mining plan. The entitlement shall remain same, in case coal is utilized for any other end use plant of the bidder in accordance with Clause 5.7.1 of the Tender Document. In Clause 5.7.2 of the Tender Document, the word entitlement should be read as "requirement".

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S. No. Query Response 70 A) Please clarify whether a company which is participating in auction for a Coal Mine, from which 150% coal requirement

of its specified end use plant can be met, can apply for any other Coal Mine for its same end use plant. From what we understand, a company participating in auction for a Coal Mine, from which 150% coal requirement of its specified end use plant can be met, can also participate in auction for other Coal Mines till allocation of Coal Mine in its favour from which 150% of\ its requirement can be met. The above is set out in the example below, in which‐ ‐ Co.A is an individual bidder ‐ JV 1 is a JV Company of Co.A and Co.B ‐ JV 2 is a JV Company of Co.A and Co.C ‐ Mine X is a Coal Mine from which 150% of coal requirement of Co.A can be met ‐ Mine Y is a Coal Mine from which 150% of coal requirement of Co.A can be met following alternative options are not allowed‐ Opt‐I Where Co.A is simultaneously participating in Auction for Mine X & Mine Y Opt‐II Where Co.A is participating in Auction for Mine X, individually and for Mine Y, through JV1 Opt‐III Where Co.A is participating in Auction for Mine X, through JV1 and for Mine Y, through JV2 (B) If Opt‐II and Opt‐III are allowed, then in both cases, if the above respective bidders of Mine X and Mine Y becomes successful bidders, then please clarify‐ (i) which of the bidders will become ineligible for which Mine? (ii) what will be the status of allocation to JV? (iii) what will happen to the remaining JV Partners of the JV, i.e. Co.B and Co.C?

For a specified EUP, a bidder can bid for multiple Coal Mines subject to eligibility conditions specified in Clause 4.1 of the Tender Document. However, if the bidder becomes Preferred Bidder, Successful Bidder, Allottee or Preferred Allottee as the case may be, pursuant to any other auction or allotment process conducted by the Nominated Authority under the Ordinance and the Rules, then the eligibility on the basis of coal requirement shall be reduced by the requirement of coal of such Specified End Use Plant met from any other coal mine allocated to the Successful Bidder pursuant to such auction or allotment process.

71 It may happen that the successful bidder post assessment of reserves, and due to change in technology for mining, may revise the GR / MP and the reassessed reserve, if is more than what was envisaged in actual GR / MP then the bidder shall be allowed to extract that extra reserve and if same is not extracted in 30years period then the block should get reallocated to the bidder automatically post assessment of reserve by the authorities. If not allowed then it may be an opportunity loss for the bidder

Mining lease shall be granted in accordance with applicable regulations.

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S. No. Query Response 72 For a successful bidder, the documents as given by central government w.r.t the block like mining lease deed and land

papers shall be considered as final and on the name of the successful bidder. Or as per the ongoing practise, the successful bidder will have to get the mining lease deed transfer and land deed transfer (mutation done) on his name through the state government. In such case one will have to bear the stamp duty on such transfer which will be an additional cost to the successful bidder and this amount will be a substantial amount. And till mutuation is done, mining operation will get affected as no operation will be done on such mines

As per applicable law.

73 In case Bidder opt to bid for particular unit(s)/phase(s) of a Specified end use project, then capacity of such unit(s)/phase(s) shall be in proportion to the Schedule II or Schedule III coal mine. Further as provided in Tender document Bidder can bid for coal block (s) having extractable reserve not exceeding 150% of the Annual Coal required of the specified end use plant, taken over 30 years period. Example – Bidder has an end use plant consist of 3 units. In case bidder opt to bid for any one unit of end use plant, then capacity of such unit shall be in proportion to Schedule II or Schedule III coal mine. Capacity of the unit (s)/phase(s) of the specified end use project for which Bidder choose to submit the bid shall be atleast 2/3rd of the extractable reserve of the Schedule II coalmine or Schedule III coal mine, as the case may be, for which Bidder is bidding;

In accordance with Clause 4.1.2 (b) of the Tender Document

74 After completion of e‐auction, Preferred Bidder will be declared for the Coal mine. There will be significant time gap between declaration of Preferred Bidder and placing of Vesting Order by Government on such Preferred Bidder for such particular mine. During this interim period Prior allottee will have access to such coal mine and will be operating the coal mine. Thus there may be possibility of occurrence adverse actions/events at coal mine which may result into additional liabilities on Preferred Bidder. To avoid such circumstances and for smooth transfer of coal mine and associated infrastructure, it is desirable to appoint a Custodian on the same day online auction is completed for the coal mine, especially if Preferred Bidder is not the Prior allottee. The Custodian can also ensure that in the last days of operation the Prior allottee does the operations within reasonable limit of various legal provisions.

Please refer to Section 23 of the Ordinance.