Coal mines to invite price based bidding soon
September 6th, 2008 | by mantrionline |Financial Express reported that in a major public private partnership initiative India government is considering development of coal mines through price based bidding as was done in case of ultra mega power projects. A proposal to this effect has been made by the power ministry and is under consideration of the coal ministry.
It has been suggested that coal blocks can be bid out by inviting competitive bids for arriving at the lowest price per tonne of coal. The bidding could be undertaken by a special purpose vehicle under Coal India Limited.
As per report, the coal so produced would be supplied and sold directly to power projects identified by the ministry of coal through agreements between the procurers and the coal mining entities.
In case, it is felt that there is a legal hurdle in executing contracts of this nature directly, then CIL could enter into contracts with the mining entities to purchase all the coal at the competitively bid rates and transfer it, through the existing mechanism for providing coal linkages to identified power projects through back to back agreements.
Besides carrying out the bidding process, it is proposed that CIL can also handle the task of carrying out preliminary groundwork including assessment of geological reserves and obtaining environmental clearances.
