The Gujarat State Electricity Corporation limited (GSECl) will soon commence the process of selecting a mine developer for Gare Palma Sector – I coal block allotted to it in Raigarh district of Chhattisgarh. The Mine Developer would be selected through ‘International Competitive Bidding’, officials stated.
Notably, the South East Central Sector which includes Chhattisgarh is set to play a key role in Central Government’s ambitious coal loading and transportation plans.
A Memorandum of Understanding (MoU) has been signed recently between Ministry of Railways and Coal India limited (CIl) which will lead to procurement of 2000 wagons (33 rakes) in the first outgo, officials stated.
The agreement which will result into speedy supply of wagons for coal loading in dedicated circuits.
Initially, the rakes will be inducted and run in the 2 main coal loading Zones of Indian Railways i.e South East Central coal sector and East Coast circuit.
These rakes will be inducted in circuits for transporting coal from MCl Talcher & IB area and SECl to Paradip/Dharma ports, Vishakhapatnam area and the power houses of Nagpur/Raipur region.
Under this strategic partnership, the wagons will be procured by Indian Railways on behalf of CIl, the maintenance of these wagons will be done by Railways at its own cost. Also, the brake vans will be provided by Railways itself.
Notably, Coal India ltd on the other hand is targeting production of 1 billion Tonnes of coal by 2020. Wagon availability will be a key factor for achieving this target by Coal India ltd. By signing of the MoU , the Railways and Coal India ltd will be entering into a strategic partnership which would ensure adequate wagon availability for meeting the transportation needs of coal produced by Coal India ltd.
The Central government has also signed a Memorandum of Understanding each with the states of Odisha, Jharkhand and Chhattisgarh for critical coal connectivity projects to improve transportation of coal, officials informed.
Agreement for World Bank loan of US $ 1100 million for Eastern Dedicated Freight Corridor (DFC) (Phase-2) have also been signed, they stated.
Moreover, the development of two key Rail corridors in mineral-rich Chhattisgarh is now set to expand the Railway line network by 45 per cent in the State, officials stated.
The completion of 235-km Dallirajhara-Rowghat-Jagdalpur, East and East-West Rail corridor (300 km) projects will comprise a total of 535 kilometers Railway-line during the next two to four years, they stated.
Chhattisgarh currently has only 1187 route kilometers Railway lines.
Chhattisgarh is also set to earn estimated revenue of Rs 51,596 crore from its five mines auctioned among 29 in the country under the provisions of Coal Mines (Special Provisions) Act, 2015 during the mining lease period.
The specified end-users of the mines are in the non-regulated sector. The mines are Chotia, Gare Palma IV-4, Gare Palma IV-5, Gare Palma IV-7, Gare-Palma Sector-IV/8.
So far 29 coal mines have been auctioned under the provisions of Coal Mines (Special Provisions) Act, 2015 and the Rules made thereunder.
The auction process for non-regulated sector viz. Iron and Steel, Cement and Captive Power was based on forward bidding process where bidders had to submit their final price offer above the applicable floor price.
In case of Power sector which is a regulated one, reverse bidding methodology was adopted where bidders had to submit bids below the applicable ceiling price, which shall be taken as fuel cost in determination of power tariff.
In case, bid price reaches `0 in reverse bidding, the bidding is based on additional premium payable to the concerned State Government, over and above the fixed reserve price of `100 per tonne.
The revenue which would accrue to the coal bearing State Government concerned comprises of Upfront payment as prescribed in the tender document, Auction proceeds and Royalty on per tonne of coal production.
In addition, an estimated amount of `1,41,854 crores would accrue to coal bearing States from allotment of 38 coal mines to Central and State PSU’s.
Out of mines included in Schedule-II of the Act and 13 are non-operational included in Schedule-III of the Act. Milestones for development and production of coal from the auctioned coal mines have been prescribed under the Coal Mines Development and Production Agreement signed with the Successful Bidder.
Chhattisgarh Chief Minister Raman Singh had announced earlier that Chhattisgarh’s revenue collections have increased by 10 per cent as the Central Government had accepted the recommendations of the 14th Finance Commission.
About `6,400 crore extra funds will now be available for the State. The royalty on mining resources and the auction of coal mines will bring extra funds amounting to `2,200 crore to the State.