Apex court upholds NTPC’s decision to reject Montecarlo bid for 3 coal mines
The Supreme Court on Tuesday upheld the NTPC decision to reject Montecarlo’s techno-commercial bid for development and operation of three coal mines — Dulanga coal block, Chatti Bariatu and Talaipalli in Odisha.
The Supreme Court on Tuesday upheld the NTPC decision to reject Montecarlo’s techno-commercial bid for development and operation of three coal mines — Dulanga coal block, Chatti Bariatu and Talaipalli in Odisha.
A bench headed by Justice Dipak Misra, while rejecting Montecarlo’s appeal, endorsed the Delhi High Court’s September 30 ruling that upheld the PSU’s decision to reject the private firm’s bid on the grounds that there would be loss of public revenue if a coal block is not operated properly.
The apex court said the highly complex technical projects require multi-pronged complex approach, including “understanding and appreciation of the nature of work and the purpose it is going to serve”. “This ensures objectivity. Bidder’s expertise and technical capability and capacity must be assessed by the experts…its aim is to achieve high degree of perfection in execution and adherence to the time schedule,” the judgment stated.
Justice Misra further said where a decision is taken that is “manifestly in consonance with the language of the tender document or subserves the purpose for which the tender is floated, the court should follow the principle of restraint”.
“Technical evaluation or comparison by the court would be impermissible. The principle that is applied to scan and understand an ordinary instrument relatable to contract in other spheres has to be treated differently than interpreting and appreciating tender documents relating to technical works and projects requiring special skills. The owner should be allowed to carry out the purpose and there has to be allowance of free play in the joints,” according to the top court.
Montecarlo had challenged its rejection on the ground that the NTPC’s August 29, 2016, communication rejecting its techno-commercial bid was “arbitrary,” “unreasonable” and contrary to the terms of tender document.
Senior counsel P Chidambaram, representing Montecarlo, had claimed that the private company engaged in the business of mining of coal and lignite possessed all the required experience in drilling, but NTPC rejected its proposal on the ground that it did not meet the qualifying requirements in this regard.
He further alleged that in the tender document, the qualifying requirement was about bidder’s experience only in drilling, excavation and hauling, and not blasting or drilling for blasting purposes as claimed by NTPC.
However, senior counsel Vikas Singh, appearing for NTPC, had argued that the PSU’s decision was in conformity with larger public interest of selecting the most suitable operator on the basis of competitive bidding. The reason for arriving at the conclusion was that the company did not have necessary experience of drilling for blasting purposes.
Govt incentivises mining exploration, engages SBI caps
To make exploration more attractive for private players, the mining ministry has decided to incentivise exploration and has engaged SBI Caps for empanelment of private players for the activity. "We are going to offer incentives for finding viable reserve and the same will be either 0.05 per cent of resource value or 10 times of the annual retention fee which ever is higher," Mines Secretary Balvinder Kumar told PTI. Advertisement seeking exploration companies for empanelment would be released soon, he said. Out of 100 mineral blocks of Geological Survey of India, 22 have been earmarked for the private sector. While, 30 blocks will be explored by Mineral Exploration Corporation Ltd, 18 would be done by state owned agencies and rest 30 by GSI themselves, Kumar said. Government will reimburse the costs to exploration firms that fail to find mineral wealth from the National Mineral Exploration Trust while, offering them a share of the revenue from blocks where they strike extractable reserves. However, the exploration firms will not enjoy any preferential right to the blocks where they find viable mineral reserves. The relaxation from the defence ministry in amending approval system will benefit the government's new mineral exploration policy under which it proposes to offer vast area for exploration. "Earlier, there were restrictions in putting certain geological data on public domain which are now relaxed, helping exploration in a bigger way," a GSI official said. Kumar said so far 16 mineral blocks with estimated resource value of Rs 17,000 crore had been auctioned and by this year the target is for total 50 blocks and in the next fiscal, government aims to put another 100 blocks under the hammer. He said for sustainable mining in the country, star rating had been introduced but the same will be based on self-certification.
Onset of winter may raise coal demand: CIL
State-run Coal India (CIL) sees sales picking up in the coming days as the onset of winters in northern India would mean an increase in power consumption.
Sales at CIL fell 1% year-on-year in the first half of the current fiscal, mainly due to the four months of a near normal, well-distributed monsoon. Coal accounts for about three-fourths of India’s electricity generation.
Over the past several weeks, power producers have been refusing to lift additional coal from pit heads, a Coal India senior executive said on condition of anonymity. As a result, coal stocks at power plants hit a low of 16 days against 22 days during the same time last year.
“Power houses have assured us that they would now be lifting more coal compared to what they have been lifting in the past several weeks,” said the executive quoted above. “The decision is based on the assumption that power demand will rise steadily now that monsoon is over.”
Production growth at Coal India was flat in the first half of 2016-17 although the company achieved 90% of its targets. Despite a marginal fall in sales, it achieved 88% of its sales target for the period. CIL managed to produce 230 MT of coal and sold around 249 MT during the period, thereby reducing stocks by by some 19 MT.
Coal India director N Kumar passes away
Coal india’s Director Technical N Kumar passed away last night.
Congress MLA leading protest against NTPC Jharkhand project held
Congress legislator Nirmala Devi, who is spearheading the protest against NTPC coal block mining in Hazaribagh district of Jharkhand, was arrested on Tuesday, police said.
"Nirmala Devi has been arrested from Hazaribagh," said Inspector General of Police (Operations) M.S. Bhatia.
She was earlier arrested on October 1 when she was sitting on a dharna with her supporters to demand a ban on the National Thermal Power Corporation (NTPC) work in Barkagao in Hazaribagh district.
She and her husband are protesting the land acquisition by the NTPC and alleged absence of suitable compensation to landowners.
After her arrest on October 1, she was allegedly freed by her supporters, after which police firing on villagers had led to the death of four persons.
Her husband and former Minister and Congress leader Yogendra Sao was arrested after the firing on the charge of instigating people. Nirmala Devi's son too was arrested in another case.
The arrest comes a day before opposition parties' rally in Barkagao to protest the land acquisition for the NTPC project.
The coal blocks of Pankri Barwadih, Chatti Bariatu and Keredari in Hazaribagh district were awarded to the NTPC in 2004. The mining work required acquisition of 4,000 acres of land from 'rayats', 2,900 acres of forest land and 1,200 acres of government land.
The land acquisition was estimated to hit 8,745 families.
http://www.business-standard.com/article/news-ians/congress-mla-leading-protest-against-ntpc-jharkhand-project-held-116101801259_1.html
Niti Aayog moots independent regulators for steel, mining sector
Government think-tank Niti Aayog has favoured creating independent regulators for steel and mining sectors in the country in a bid to make both industries profitable. The premier policy-making body has also pitched for a new and dynamic steel policy to bring the over US $100 billion industry back on track as well as meet the target of 300 million tonnes (mt) capacity by 2025.
"Since steel is a deregulated sector, there is need for an independent regulator for effective regulation, which the sector presently lacks," Aayog said in a working paper. "Also, in the mining sector, though NMDC should act as a regulator, it itself is engaged in iron ore mining, which may create conflict of interest. Therefore, a new independent regulator is required in the mining sector as well." About the deteriorating financial health of steel firms, Niti Aayog said firms have a huge debt load over the past couple of years due to the combined effect of supply and demand factors.
"Situation is quite critical as they are not even able to service their interest cost. There was an aggregate debt of Rs 45,160 crore on the iron and steel industry in 2014, according to the corporate debt restructuring cell progress report, which has increased to Rs 53,580 crore in March, 2016," it added.
The working paper -- prepared by Niti Aayog Member VK Saraswat and Niti Aayog professional Ripunjaya Bansal -- said share of stressed advances has reached 25%, of which 19% are restructured standard advances and 7% are non-performing assets (NPAs).
It said the government has provided financial support to steel firms earlier in 1999 and 2003 while it is trying to support through RBI's strategic debt restructuring scheme currently. "Therefore, the steel sector, which has a long gestation period, needs long-term finance like pension funds, which have the capacity to withstand cyclical volatility of profits unlike funding from banks, external commercial borrowing (ECB) or capital markets," the paper suggested.
According to the think-tank, mere changes in the National Steel Policy, 2012, will not benefit the sector, which over the last few years has been flooded with cheap imports from China, Korea and Japan impacting its sales and profit. This has also impacted its capacity to repay debt.
"There is need for a new and dynamic steel policy. Seeing the current situation of the steel sector, it may be unlikely to achieve the targets envisaged in the National Steel Policy 2012 i.e. a capacity of 300 mt and production of 275 mt by 2025," it added. "To bring steel sector back on track, mere tinkering in the present policy would not bring out a transformational change that is required."
Aayog feels there is a need to examine the entire value chain associated with the industry -- from raw materials to production of finished products -- to discover the bottlenecks in the sector.
http://www.dnaindia.com/money/report-niti-aayog-moots-independent-regulators-for-steel-mining-sector-2265345
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