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Govt looks at reopening defunct mines, asks CIL to start talks with private miners

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SummaryThe PMO has insisted on a common model concession agreement to avoid charges of favouritism.

The government has asked Coal India (CIL) to begin talks with private mining companies for extracting coal from defunct mines.

But to ensure the charges of favouritism does not haunt this initiative, the Prime Minister’s Office has insisted that a common model concession agreement (MCA) should be used for the outsourcing operations. It also wants the developers to bring the mines into production within five months.

The initiative comes even as CBI is investigating the ramifications of the previous round of coal mining contracts awarded from 1993 to 2008. The agency has filed 14 FIRs in the cases till now including the highly controversial one against Hindalco and the chief executive of the group, Kumar Mangalam Birla.

Singh’s principal secretary Pulok Chatterji has directed that the final version of the concession agreement to be prepared jointly by the plan panel and the ministry should be ready by next week.

Setting the time lines for execution of various stages till the awarding of contracts to the mine developers and operators, “Chatterji said the final draft of the MCA should be approved by the ministry’s inter-ministerial group and the CIL board should adopt it by November 30. The issuing of request for qualification (RFQ) is to be completed by December 15 and request for proposal (RFP) by February 2. The award of contracts by CIL should be by March 2014,” an official who attended the meeting told The Indian Express.

But coal secretary Sanjay Srivastava has said each of the seven projects with a projected annual output of 10-20 million tonne can only be mined if the railways help by completing the critical rail links and the state governments cooperated in ironing out issues like land acquisition and statutory clearances.

The proposal of outsourcing mining of Coal India’s blocks was conceptualised by Planning Commission deputy chairman Montek Singh Ahluwalia, who had an year ago asked coal minister Sriprakash Jaiswal to ask Coal India to allow private participation through the PPP mode.

As suggested by the plan panel, the private firms are to be roped in “on the basis of agreed costing” to be determined through competitive bidding. He had suggested that the coal ministry should devise a transparent and competitive mechanism for selecting the operators and ensure that “the contract would allocate risks and rewards in the most optimal manner and to the best advantage of CIL.”

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