Gujarat Mineral Development Corporation (GMDC) BID DOCUMENT FOR SELECTION OF MINE DEVELOPER AND OPERATOR (MDO) FOR DEVELOPMENT AND OPERATION OF THE

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1 Gujarat Mineral Development Corporation (GMDC) BID DOCUMENT FOR SELECTION OF MINE DEVELOPER AND OPERATOR (MDO) FOR DEVELOPMENT AND OPERATION OF THE MORGA II COAL BLOCK e -Tender No.: MORGA II/ Cost of Tender Document: Rs lacs (Three Lacs only) ( Non Refundable) Sole Transaction Advisors a XYKno Capital Services Limited

2 e- Tender No.: MORGA II/ MINE DEVELOPER AND OPERATOR (MDO) FOR DEVELOPMENT AND OPERATION OF THE MORGA II COAL BLOCK Place of work Brief Description of work Period of contract EMD Cost of tender Document Availability of Tender Downloading of tender document from websites Pre-bid Meeting Last date of on line submission of offer Submission of Tender Fee, EMD and Supporting documents for Tech. bid Date and time for online opening and viewing of preliminary bid. Morga II Coal Block, Distt. : Korba, State : Chhattisgarh Development and operation of Morga- II coal block to supply washed coal for power generation. 30 years or the life of the coal block Rs (Forty ) Crore In the form of Bank Guarantee, issued by any Nationalised Bank or IDBI, ICICI, Axis, HDFC banks only in India valid for a period of not less than 6 (six) months from the date of opening of preliminary bid. Rs. 3,00,000 (Three) Lac payable by Demand Draft favouring GMDC Ltd. payable at Ahmedabad. On web site /05/2010 to 28/05/2010 On 02/06/2010 at Hours at GMDC Corporate office, Ahmedabad 30/06/2010 upto14.00 Hrs. only on only. 30/06/2010 upto Hrs. at Corporate office, Ahmedabad. 30/06/ Hrs, 1. The Corporation reserves the right to reject any or all the tenders or split the work between more than one bidders without assigning any reason thereof. 2. The bidders are required to quote the rate strictly as per the terms and conditions mentioned in the Tender document. The conditional tender will not be entertained and shall be liable for outright rejection. 3. The Corporation reserves the right to reject any or all the tenders without assigning any reason thereof. 4. The bidders are required to submit their bids on line on GENERAL MANAGER (P,R&D) GUJARAT MINERAL DEVELOPMENT CORPORATION LTD. (A Govt. of Gujarat Enterprise) KHANIJ BHAVAN, 132 RING ROAD, UNIVERSITY GROUND VASTRAPUR, AHMEDABAD (D), EPABX : , EXTN FAX: (079) tech@gmdcltd.com Page 2 of 101

3 Table of Contents A1: DISCLAIMER 5 A2: LIST OF ABBREVIATIONS 7 A3: DEFINITIONS AND RULES OF CONSTRUCTION 8 DEFINITIONS 8 RULES OF CONSTRUCTION 9 GOVERNING LAW 10 1A4: INTRODUCTION AND BACKGROUND 11 INTRODUCTION 11 MORGA II COAL BLOCK 11 OBJECTIVE 14 A5: DESCRIPTION OF THE SELECTION PROCESS 16 A6: PROPOSAL REQUIREMENTS 20 PROPOSALS INVITED 20 TECHNICAL & FINANCIAL PROPOSALS 21 TECHNICAL PROPOSAL REQUIREMENTS 22 FINANCIAL PROPOSAL REQUIREMENTS 23 A7: EVALUATION METHODOLOGY 27 A8: SPECIFICATION, QUANTITY TO BE HANDLED, ANALYSIS OF COAL AND COMMENCEMENT DATE 28 A9: APPLICABLE PRICE, BASIS OF PAYMENT & PRICE ADJUSTMENT AND PAYMENT TERMS 29 A10: INSTRUCTIONS TO BIDDERS (ITB) 31 OPENING OF PROPOSALS 32 Page 3 of 101

4 DISQUALIFICATIONS 33 CHANGE IN CONSORTIUM OR FORMATION OF CONSORTIUM 34 FURTHER INFORMATION 34 INSTRUCTION TO BIDDERS FOR ONLINE TENDERING 34 A11: TERMS OF REFERENCE (TOR) 36 A12: EXECUTIVE SUMMARY 39 A13: FORMAT FOR COVERING LETTER FOR QUALIFICATION PROPOSAL 40 A14: FORMAT FOR SUBMISSION OF TECHNICAL CRITERIA AS PER QUALIFYING PROPOSAL REQUIREMENTS 41 A15: FORMAT FOR SUBMISSION OF FINANCIAL CRITERIA AS PER QUALIFYING PROPOSAL REQUIREMENTS 43 A16: FORMAT OF COVERING LETTER FOR TECHNICAL PROPOSAL 45 A17: FORMAT FOR SUBMISSION OF ADDITIONAL INFORMATION 46 A18: FORMAT OF COVERING LETTER FOR FINANCIAL PROPOSAL 47 A19: FORMAT OF BANK GUARANTEE - EMD 489 A20: FORMAT OF MEMORANDUM OF UNDERSTANDING 51 A21: ESCALATION INDEX FOR COAL MINING SERVICES FEE 53 A22 : DRAFT COPY OF COAL MINING SERVICE AGREEMENT 54 Page 4 of 101

5 Chapter 1: DISCLAIMER 1.1 This document is not an agreement or an offer by GMDC to Bidders or any third party. The purpose of this document is to provide interested parties with information to facilitate the formulation of their Proposal for Qualification and Price Bid. 1.2 This document does not purport to contain all the information each Bidder may require. The Document may not be appropriate for all persons, and it is not possible for GMDC to consider the needs of each party who uses or reads this Document. The concerned parties should conduct their own investigations and analysis and should verify the accuracy, reliability and completeness of the information in this document and obtain independent advice from appropriate sources. 1.3 Neither GMDC nor its employees or its consultants make any representation or warranty as to the accuracy, reliability or completeness of the information in this document. 1.4 Neither GMDC nor its employees or consultants shall have any liability to any Bidder or any other person under the law of contract, tort, the principles of restitution or unjust enrichment or otherwise for any loss, expense or damage which may arise from or be incurred or suffered in connection with this Document, or any matter deemed to form part of this document, the award of the work, or the information and any other information supplied by or on behalf of GMDC or its employees, any consultants or otherwise arising in any way from the selection process for the project. 1.5 The bidder should confirm that the document is complete in all respects. In the event that the Document or any part thereof is mutilated or missing, the Bidder must notify GMDC immediately at the following address: General Manager (P,R&D) Gujarat Mineral Development Corporation Limited. Khanji Bhavan, 132 FT Ring Road University Ground, Vastrapur Ahmedabad Fax : Phone : (D) / / 3501 Extn : tech@gmdcltd.com Page 5 of 101

6 1.6 The Document and the information contained herein are strictly confidential and privileged and are for the exclusive use of the party to whom it is issued. This Document must not be copied or distributed by the recipient to third parties (other than, to the extent required by the applicable law or in confidence to the recipient s professional advisors, provided that such advisors are bound by confidentiality restrictions at least as strict as those contained in this document). In the event that after the issue of the document the recipient does not continue with its involvement in the bidding process for any reason whatsoever, this document and the information contained herein must be kept confidential by such party and its professional advisors at all times. 1.7 GMDC reserves the right to change, modify, add, alter the Document or cancel the bidding process without assigning any reasons thereof, at any time during the bidding process. All parties to whom this Document has been issued shall be intimated of any such change. The Bidders or any third party shall not object to such changes/ modifications/ additions/ alterations explicitly or implicitly. Any such objection by the bidder shall make the Bidder s proposal liable for rejection by GMDC. Further objection by any third party shall be construed as infringement on confidentiality and privileged rights of GMDC with respect to this Document. 1.8 The Bidder shall not make any public announcements with respect to this Bidding process or this document. Any public announcements to be made with respect to this bidding process or this Document shall be made exclusively by GMDC. Any breach by the Bidder of this clause shall be deemed to be non-compliance with the terms and conditions of this Document and shall render the Proposal for Qualification liable for rejection. GMDC s decision in this regard shall be final and binding upon the Bidder. 1.9 It is clarified that the provisions of clauses 1.6, 1.7 and 1.8 shall not apply to information relating to this Document already available in the public domain prior to the issue of this document The bidder shall bear all costs associated with the preparation and submission of the Technical and Financial Proposals. GMDC and their consultants shall not, under any circumstances, be responsible or liable for any such costs. Page 6 of 101

7 Chapter 2: LIST OF ABBREVIATIONS GMDC MDO MoU SPV LoI MTPA OMS GCV FY ADB ARB TPS R&R HEMM OB EIA EMP ETP RBI Gujarat Mineral Development Corporation Limited Mine Developer and Operator Memorandum of Understanding Special Purpose Vehicle Letter of Intent Million Metric Tonnes Per Annum Output per Man Shift Gross Calorific Value Financial Year Air Dried Basis As Received Basis Thermal Power Station Rehabilitation and Resettlement Heavy Earth Moving Machinery Over Burden Environment Impact Assessment Environment Management Plan Effluent Treatment Plant Reserve Bank of India Page 7 of 101

8 Chapter 3: Definitions and Rules of Construction Definitions 3.1 Authorized Representative(s) and Signatories: Each Bidder shall designate maximum two persons ( Authorized Representatives and Signatories ) authorized to represent the Bidder in all matters pertaining to its proposal. These designated persons should hold the power of attorney duly authorizing them to perform all tasks including but not limited to sign and submit the proposal; to participate in all stages of the Bidding process; to conduct correspondence for and on behalf of the Bidder, and to execute the Project Agreement and any other documents required to give effect to the outcome of the Bidding process. The original power of attorney, duly notarized, in favor of the Authorized Representatives and Signatories shall be enclosed by the Bidder along with the covering letter. 3.2 Bidder: Bidder shall mean Bidding Company which is a single registered corporate entity or Bidding Consortium which is consortium of two corporate entities that has submitted a Bid in response to this document. 3.3 Bidding Consortium: Bidding Consortium shall mean group of two corporate entities which have formed consortium for submission of a Bid in response to this document. Bidding Consortium can be of maximum two members. 3.4 Member in Bidding Consortium: Each individual company in the Bidding Consortium is referred to as a Member in the Bidding Consortium. 3.5 Lead Member of the Bidding Consortium : Lead Member in case of Bidding Consortium shall mean the member of the consortium who is so designated by the Consortium Members and meets the financial qualifications for the Bidding Consortium and holds minimum 51 % stake/share at all times. Lead Member shall purchase the Bid document. Lead Member shall be solely responsible for all liabilities including financial, legal, environmental and technical liabilities on behalf of Bidding Consortium. 3.6 Performance Bank Guarantee: Performance Bank Guarantee shall mean the guarantee to be furnished by the Bidder who is selected based on the Bidding process. 3.7 Bid Document: The Bid document comprises of definitions, rules of construction, description of the selection process, qualifying requirements and instruction to bidders, etc. to enable the Bidders to prepare their proposal for qualification. 3.8 Financial Year: Financial Year shall mean the 12 month period corresponding to the audited financial statements. Page 8 of 101

9 3.9 Mine Developer and Operator (MDO): The Mine Developer and Operator would be the Bidder selected through bidding process, who would sign and execute the Coal Mining Services Agreement and/or Legal Agreements as prescribed by the laws applicable, with GMDC. The MDO shall include its legal representatives, successors and permitted assigns Sampling/ Analysis : Sample / Analysis to be carried out as per IS standard Net Worth: Net worth is the sum total of paid up capital and free reserves. Free reserves means all reserves credited out of the profits and share premium account but do not include reserves credited out of revaluation of assets, write back of depreciation provisions and amalgamation. Further, any debt balance of profit and loss account and miscellaneous expenses to the extent not adjusted or written off, if any, shall be reduced from Reserves and Surplus Operating Year : Operating Year shall mean the Financial Year starting from 1st April and ending on 31st March of subsequent Year Turnover: Turnover is Gross Sales or Gross Revenues, as defined by the Indian Accounting Standards published by the Institute of Chartered Accountants of India Project: The project refers to the planning, engineering, financing, construction, operation and maintenance of the Morga II Coal Mine and shall include all such works as detailed in the Bid document Coal Mining Services Agreement: The agreement as may be entered into between GMDC and the Bidder selected through the bidding process, for execution of the Project Project Proposal: Project Proposal shall mean the proposal submitted by Qualified Bidders in response to the Bid Document Qualifying Proposal Requirements: Qualifying requirements shall mean the requirements set forth in this document for the purpose of evaluation Effective Date: Effective Date means the date of execution of the Coal Mining Services Agreement. Rules of Construction 3.19 Words imparting singular shall also include plural and vice-versa and any word defined in the singular shall have the corresponding meaning when used in the plural and vice versa The titles or headings in this Bid Document are for convenience and easy reference only and shall not be taken into account for the purpose of construction or interpretation of this Bid Document Any reference to person shall include companies, firms, corporations and as- Page 9 of 101

10 sociations or bodies of individuals, whether incorporated or not and shall include their respective successors in business and permitted assigns A reference to any gender includes the other gender Unless otherwise specified, a reference to a Section, Clause, Annexure, Schedule, Attachment or paragraph is a reference to a Section, Clause, Annexure, Schedule, Attachment or paragraph of this Document The terms include and including shall be deemed to be suffixed with the words without limitations, whether or not so followed. Governing Law 3.24 The Document shall be governed by and interpreted in accordance with laws in force in India and the Courts of Chhattisgarh shall have exclusive jurisdiction over matters relating thereto. Page 10 of 101

11 Chapter 4: INTRODUCTION AND BACKGROUND Introduction 4.1 The Ministry of Coal has allocated Morga II Coal Blocks in Hasdeo- Arand coal field to Gujarat Mineral Development Corporation Limited for captive coal mining under Government company dispensation. The total coal reserve in above coal block is approx. 350 million MT. 4.2 GMDC is looking for technically competent and financially sound MDO to undertake development, mining of coal, coal beneficiation and loading of washed coal from washery stockyard. MORGA II COAL BLOCK 4.3 The Morga II coal block is located in Hasdeo - Arand coalfield, Korba in the state of Chhattisgarh. This coal block is located on western part of Hasdeo Arand coalfields and eastern side of Hasdeo river. The block is triangular in shape and extends about 7.0 km along strike direction (NNE-SSW) and about 6.0 km along dip direction (SE). The present geological appraisal of the block has been based on the data generated in 10 boreholes drilled by GSI failing within the boundaries of the block and also the projections made from the boreholes located in the immediate vicinity of the block. 4.4 The Morga II block is located in north central part of the Hasdeo Arand coalfield in Chhattisgarh State. Morga II block covers an area of Sq.Km. between Lat North and Long and East. The block is covered under Survey of India Toposheet No. 64 J/9 and 64 J/10 on RF 1:50,000. The block falls within Korba district of Chhattisgarh state. The Morga II block is triangular in shape. 4.5 District headquarters and Transportation: State Highway 2A connecting Bilaspur with Ambikapur, the district headquarters towns of Bilaspur and Surguja districts respectively passes through Morga area lying at the west of Hasdo river. The other nearby townships are Lakhanpur (40 km.) and Ambikapur (80 km.), on this State Highway. The accessibility within the block is through kutcha/unmetalled roads from Kotma and Kendai villages close to the state highway. 4.6 Nearest road head with the mines: The nearest Railway Station at Bishrampur on Bijuri-Ambikapur section of South East Central Railway is about 80 km. from the block. 4.7 Topography: 21.0 Sq. Km. with contouring at 5m interval. Page 11 of 101

12 4.8 Boundary of the coal mine: North: A line connection points at about 50m north of borehole HAM-06 and 600m north of borehole HAM-09. South: An imaginary line connecting points at 550m south of borehole HAM-15 and 1200m south of borehole HAM-13. East: An imaginary line connecting points at borehole HAM-37 and 150m east of borehole HAM-10 and joining the northern and southern boundaries. West: An imaginary line connecting points at 800m west of borehole HAM-13, 50m west of borehole HAM-06 and 650m west of borehole HAM-09 and joining the northern and southern boundaries. 4.9 Status of Exploration (i) Geological Formation: Barakar Formation (ii) Geological Structure: Strike of the formation generally NNE-SSW. Dip of the formation. Generally 2 to 5 towards SE Faults: The block is traversed by 9 faults viz. F1-F1 to F9-F9. The maximum throw of the fault is 90m west wards against the dip, leading to repetition of coal seams Intrusives: The area is free from any igneous activity and as such the seams are free from pyrolitisation. Page 12 of 101

13 4.12 Sequence of Coal Seams and Quality: Seam / Parting Thickness (m) General Thickness (m) Min Max Min Max Proximate Analysis on 60% RH & 40 o C Mi n M% Ash% VM% Ma x Gross CV in Kcal / kg Min Max Min Max Min Max Mi n Grade Ma x Domi -nant VI UG UG Parting V UG F Parting IV F E Parting UG G E-F III D C D Parting I C A C Parting IB B B B Note: 1. The above details pertain to I 100 samples. 2. Quality details in respect of Seam V pertain to two boreholes falling outside the block boundary. Page 13 of 101

14 4.13 Reserves: i) Seam-wise Reserves Seam Name Gross Indicated Reserves (Mt) Share % Broad Grade Broad Thickness Range (m) SEAM-VI UG SEAM -V G SEAM -IV E/F >10.0 SEAM-III D SEAM-I C TOTAL > Mining Potential: As per the data available, Seams VI, V, IV and III occur at shallow depth and incrop in the block. Of these, seams VI and V are thin and have no economic potential. The parting between Seam V and lower potential Seam IV ranges from 44 to 65m. Seam IV and III with cumulative thickness of about 15m and interseam parting varying from 18-20m, offer quarriable potential in the entire block. The total reserves of Mt of Seams VI, V, IV and III offer overall average stripping ratio of 6.1 for the entire life of the mine. The estimated depth of excavation is 200m. Seam I occurs at the depth range of to m. The parting between Seam III and I ranges from 70-80m. The seam has thickness range of 0.23 to 4.33m and average grade C. This seam could be considered for underground mining. Note: The Regional Exploration Report of the Morga II coal block is available at the GMDC head office in Ahmedabad for perusal. Objective GMDC proposes to develop and operate Morga II coal blocks in Chhattisgarh, allocated by the Ministry of Coal under Government Dispensation, by appointing a MDO. The coal block is to be developed into a captive coal mine of capacity around 12 MTPA. GMDC desires to select a MDO who will invest in the mining project and undertake development and operation of coal mine and coal washery and all activities upto loading of washed coal into transportation system at ex-washery stockyard. Page 14 of 101

15 Bid Document Timelines Sr. No. Particulars Date (No. of Days) 1 Notice of Inviting Tender May 14, Closure of Sale of Bid Document May 28, Pre-Bid Conference June 02, 2010 at Hours at GMDC Ahmedabad office 4 Issue of Clarifications, if any June 10, Last date for submission of MOU in case of Consortium June 16, Last date for online submission of Bid June 30, 2010 upto Hours 6 Date and time of online Opening of preliminary bid June 30, 2010 at Hours 7 Opening of Financial Proposal To be conveyed 8 Issue of LOI As decided by GMDC management Page 15 of 101

16 Chapter 5: DESCRIPTION OF THE SELECTION PROCESS The objective of GMDC is to select a MDO who has the financial strength and experience in coal mining operations to ensure proper development and operations of the Morga II coal mines in accordance with the requirement of GMDC. SELECTION PROCESS 5.1 The selection process for the MDO shall consist of the following steps: (i) Responsiveness Check Step I (ii) Qualification Proposal Evaluation Step II (iii) Technical Proposal Evaluation Step III (iv) Financial Proposal Evaluation Step IV 5.2 The cost of tender document would be Rs. 3,00,000 (Rs Three Lac) payable by Demand Draft favouring GMDC Ltd. payable at Ahmedabad. 5.3 The tender documents submitted by the bidders (including qualification, technical and financial proposals) shall be accompanied by Earnest Money Deposit (EMD) of INR 40 crore in the form of irrevocable bank guarantee issued by any Nationalised Bank or IDBI, ICICI, Axis, HDFC banks only in India valid for a period of six months from the date of submission of the Bid. The bank guarantee of the unsuccessful bidders shall be returned within one month of the issue of Letter of Intent (LOI) to the successful bidder. For the successful bidder this bank guarantee shall be returned within one month from the Effective Date as defined in this document or the Coal Mining Services Agreement. Step I: Responsiveness Check 5.4 The Proposal submitted by the Bidders in response to this Bid Document shall initially be scrutinized to establish Responsiveness. A Proposal shall deemed to be Non-responsive in the following cases: (i) It is not received by the last date and time specified for submission of Proposal (ii) It does not include sufficient information for it to be evaluated objectively (iii) Prima-facie there is significant inconsistencies between the information submitted and the supporting documents. (iv) It is not signed and/ or sealed in the manner and to the extent indicated in the Bid document. Step II: Qualification Proposal Evaluation 5.5 The Qualification Proposal shall be initially scrutinized to establish responsiveness. A Qualifying Proposal shall deemed to be Non-responsive in the following cases: Page 16 of 101

17 (i) It does not include sufficient information for it to be evaluated objectively (ii) Prima-facie there is significant inconsistencies between the information submitted and the supporting documents. (iii) It is not signed and/ or sealed in the manner and to the extent indicated in the Bid document. 5.6 The Bidders need to submit a Qualification Proposal demonstrating their Technical, and Financial Capabilities. The information required to be provided by the Bidders submitting their Qualification Proposal is outlined in Section The Responsive Qualifying Proposals shall be evaluated to determine their compliance with the Qualifying Proposal Requirements, detailed in Section 6. For this purpose, GMDC shall use the supporting documents and/ or information available with or obtained by GMDC. 5.8 The Qualification Proposal is to be submitted by domestic or international parties or consortiums (whether currently existing or to be formed specifically to participate in specific projects). An interested person can be a member of one Bidding Consortium only. 5.9 In case of Bidding Consortium the Bid must mention the name of the Lead Member. The Bidder or the Lead Member of the Bidding Consortium should designate maximum two persons to represent the Bidder in its dealings with the GMDC Representative. The persons so designated shall be authorized to perform all tasks including, but not limited to providing information, responding to enquiries, entering into an agreement on behalf of the Bidder/Bidding Consortium The Bidder/Bidding Consortium should submit a Power of Attorney, authorizing the signatory of the Bid, along with submission of Bid Bidder or Lead Member of Bidding Consortium shall provide Board Resolution(s) committing 100% of investment of the Bidding Consortium In case of Bidding Consortium, the members of the Bidding Consortium need to execute a notarized MOU on a non-judicial stamp paper clearly identifying all the individual members and to specify the ratio of stake/profit share of the individual members in the Consortium Bidder Company or members of Bidding Consortium shall meet technical or financial qualifying requirement on stand alone basis. Bidder is not allowed to draw strength from their parents/promoters/subsidiaries /associates/sister companies In case the Bidder is a Bidding Consortium, only Lead Member of the Bidding Consortium shall meet the Financial Qualification Criteria i.e. Turnover, Net worth and Cash Accrual In case the Bidder is a Bidding Consortium, then Technical Qualification Criteria can be met by any one Consortium Member. Page 17 of 101

18 5.16 The Bidder or Bidding Consortium must fulfill the Technical and Financial requirements of Qualification Proposal in order to be considered for the next step in selection process. Step III: Technical Proposal Evaluation 5.17 The Bidders qualified in the Qualification Proposal Evaluation Step shall be considered for Technical Proposal evaluation (Step III) The Technical Proposal shall be scrutinized to establish responsiveness. A Technical Proposal shall deemed to be Non-responsive in the following cases: (i) It does not include sufficient information for it to be evaluated objectively (ii) Prima-facie there is significant inconsistencies between the information submitted and the supporting documents. (iii) It is not signed and/ or sealed in the manner and to the extent indicated in the Bid document The Bidders need to submit a Technical Proposal. The information required to be provided by the Bidders submitting their Technical Proposal is outlined in Section 6 as Technical Proposal Requirements The Responsive Technical Proposals shall be evaluated to determine their compliance with the Technical Proposal Requirements, detailed in Section 6. For this purpose, GMDC shall use the supporting documents and/ or information available with or obtained by GMDC. Step IV: Financial Proposal Evaluation 5.21 The Bidders submitting the Technical Proposal as per Bid document shall be considered for Financial Proposal Evaluation (Step IV) The Financial Proposal shall be initially scrutinized to establish responsiveness. A Financial Proposal shall deemed to be Non-responsive in the following cases: (i) It does not include sufficient information for it to be evaluated objectively (ii) Prima-facie there is significant inconsistencies between the information submitted and the supporting documents. (iii) It is not signed and/ or sealed in the manner and to the extent indicated in the Bid document The Bidders need to submit a Financial Proposal. The information required to be provided by the Bidders submitting their Financial Proposal is outlined in Section 6 as Financial Proposal Requirements. Page 18 of 101

19 5.24 The Responsive Financial Proposals shall be evaluated to determine their compliance with the Financial Proposal Requirements, detailed in Section 6. For this purpose, GMDC shall use the supporting documents and/ or information available with or obtained by GMDC. Page 19 of 101

20 Chapter 6: PROPOSAL REQUIREMENTS Proposals Invited 6.1 The Proposals may be submitted by Indian or International parties or consortiums (whether currently existing or to be formed specifically to participate in specific projects). 6.2 The bidders are invited to submit a three-part proposal Qualification Proposal, Technical Proposal and Financial Proposal, as specified in this document for Mine Development and Operations. 6.3 The bidders must familiarize themselves with local conditions and take them into account in preparing their Proposals. To obtain first-hand information on the proposed assignment and on the local conditions, bidders are advised to visit the mine site before submitting a Proposal. 6.4 Please note that (i) the costs of preparing the proposal and of negotiating the agreement, including a visit to GMDC, are not reimbursable as a direct cost of the Assignment; and (ii) GMDC is not bound to accept any of the Proposals submitted. Qualifying Proposal Requirements To finalize 6.5 The Bidders shall furnish all the details as per Technical Criteria, Financial Criteria mentioned below: In case of a Bidding Consortium, Technical Criteria can be met by any one of the Members but the financial criteria must be met by the Lead Member Technical Qualifying Criteria The interested Bidders need to adequately demonstrate possessing the following technical capabilities in order to be considered for the Technical Proposal Stage (Step III) of the Bidding Process: The bidder shall have at least 3 years experience in coal/lignite mining ( including over burden, opencast or underground, either in India or Abroad) with an average annual excavation or production of at least 7.5 million tonnes of Coal /Lignite ( overburden removal is included for the purpose) for the last 3 financial years i.e , and The bidder shall have employed atleast 15 technical persons with experience in mining and/ or mineral exploration industry. The bidder shall possess sufficient number of excavators, dumpers and ancillary equipments of matching capacities to deal with the production as mentioned above. (documentary evidence duly certified by Chartered Accountant for the same shall be provided with bid documents). Page 20 of 101

21 Preference may be given to a Bidder who has been awarded LoI for similar nature of work as envisaged for this Project Financial Qualifying Criteria The Bidder (or Lead Member in case of a Bidding Consortium has to satisfy the following financial criteria of Turnover and Net worth in order to be considered for the Technical Proposal stage (Step III) of the Bidding process: The Bidder shall have to fulfil the Net worth requirement of atleast Indian Rupees 750 Crore (Seven Hundred and Fifty Crores) as on 31 st March The Bidder shall have to fulfil the annual turnover requirement of at least Indian Rupees 3000 Crore (Three Thousand Five Hundred Crores) each year for the last 3 Financial Years (FY 06-07, 07-08, 08-09). The bidder or Lead Member of the consortium shall be a profit making company in the last three financial years with an average Net profit of atleast Rs. 100 crores for the last three Financial Years (FY 06-07, 07-08, 08-09). Note: 1. The terms Net worth and Turnover shall have the meaning and definition as stated in this document. 2. Where the financial statement is expressed in currency other than Indian Rupees, the financial qualification as described above shall be computed by converting the financial figures to Indian Rupees based on the exchange rates (RBI Reference Rate) prevailing on the 31 st December 2009 for submission of bids. 3. In case Bidder is a Bidding Consortium, the Turnover, Net worth and Net profit (i.e. all financial criteria) of only Lead member on stand-alone basis shall be considered. 4. In case of Bidding Consortium, each Consortium member shall meet either Technical Qualifying Criteria in totality (6.5.1) or Financial Qualifying Criteria in totality (6.5.2). A Bidding Consortium with a Consortium member not meeting either Technical Qualifying Criteria or Financial Qualifying Criteria will be rejected. Technical & Financial Proposals 6.6 In preparing the Technical and Financial Proposals, bidders are expected to examine the documents comprising this Bid Document in detail. Material deficiencies in providing the information requested may result in rejection of a Proposal. Page 21 of 101

22 Technical Proposal Requirements 6.7 The Bidders need to submit conceptual report for mine planning for development and operations of the proposed mine that should include all of the following: Mine production schedule Open pit design, selection of appropriate mining method & reporting of justifications for the selection, and design & specification of coal and overburden benches. Land requirement, including land required for rehabilitation & resettlement, mine development, waste dumps and all coal mining related activities. Equipment selection and specifications along with justification for fleet selection. Drilling and blasting methods and design, storage and handling of explosives, coal and waste handling and storage planning. Specification and layout of Coal handling plant and coal washery including primary crushers Coal transportation planning within mining leasehold and from mine-head to the destination. Mine drainage system design and layouts, requirement of water pumping and storing. Manpower requirement and indication of Output per Man Shift (OMS) for both coal and overburden. 6.8 The Bidders need to submit ramp up plan for reaching maximum capacity production. 6.9 The Bidders also need to submit outline report for environmental management planning. Outline report of Environmental management plan should provide the mitigation measures including the prevention and control of environmental issues on Air pollution, Water pollution, Water Conservation, Noise pollution, Solid waste/tailings, Land degradation, Erosion and sediment, Top soil, Ground vibration, Wildlife conservation, Forest protection, others if any and resettlement and rehabilitation plan The Bidders shall also submit progressive mine closure plan The Bidders shall submit the equipments, scheme of operations, and other relevant details of the coal washery to be set up to supply the required quality of coal The Bidders shall undertake management/use/disposal of washery rejects as per extant guidelines of Ministry of Coal or Ministry of Environment and Forest, Government of India The Bidders need to submit detailed curriculum vitae of personnel who shall work on the project, along with their roles and responsibilities. Page 22 of 101

23 6.14 The Bidders shall submit a tentative deployment schedule of mining equipment. The Bidders shall adopt the format of the table given below, to show the proposed deployment. S.NO DESCRIPTION (TYPE, MODEL, MAKE) EQUIPMENT TYPE NO. OF EACH CAPACITY Financial Proposal Requirements 6.15 The Bidders shall provide the Coal Mining Services Fee per tonne for the first year of commencement of coal supply, where: (i) (ii) (iii) (iv) (v) (vi) All the operating and maintenance expenses, transportation costs of coal from mine faces to primary crusher and there on to the washery till the washery stockyard, shall be included in the Coal Mining Services Fee. Capital expenses including cost of mining equipment, cost of coal washery, land acquisition, rehabilitation & resettlement (in accordance with the R&R policy of Government of Chhattisgarh), approvals & clearances shall be included in the Coal Mining Services Fee. The transport cost from working faces in the mines to primary crusher, from crusher to washery and from washery to ex-washery stock yard shall be deemed to be paid through Coal Mining Services Fee quoted by the bidders. Coal Mining Services Fees from 2 nd Operating Year onwards till term of agreement will be paid in accordance with clause 6.16 for the coal delivered to GMDC, and coal production shall be determined by the coal requirements of GMDC ( approximately 12 million tones of Raw Coal per annum) and Mine Plan approved by the Ministry of Coal. All taxes, duties, levies and fees applicable for providing coal mining services (both present and future) including royalty, stowing excise duty, service tax, environment cess, CST, VAT, GST payable to the State and/or Central government or any other authority shall be excluded in the Coal Mining Services Fees quoted and shall be reimbursed at actual based on documentary evidence. No other payments shall be paid by GMDC, apart from the applicable Coal Mining Services Fees and the taxes, duties, levies incurred during the entire mine life under any circumstances. Page 23 of 101

24 (vii) (viii) The Coal Mining Services Fees shall be quoted for the 1 st Operating Year. The Coal Mining Services Fee shall be quoted for coal with an average GCV (ADB) of 4200 KCal/kg, Ash content (ADB) 32% & Moisture content up to 10% (ARB). ITEM DESCRIPTION 1 Coal Mining Services Fee (a) All Operating and Capital costs including Interest, Depreciation, Land Acquisition, R&R, approvals/clearances costs, coal block development, OB removal, coal mining, crushing, transportation within mine area and all other costs of raw coal upto ex-mine stock yard. (Rs. Per MT of Raw Coal) (b) All Operating and Capital costs of Coal Washery including transportation of Raw coal from ex-mine stock yard to coal washery, beneficiation of coal and management/ disposal/ use of washery rejects. (Rs. Per MT of Raw Coal) (c) Washing yield 77.5% = [ (a +b)/0.775 (a + b)] (Rs. Per MT) (d) Loading of Raw / Washed coal in transportation system exwashery stock yard (Rs. Per MT Coal) Coal Mining Services Fees (Rs. Per MT of Washed Coal exwashery) (a + b + c + d) 2 Service Tax 3 Royalty 4 Stowing Excise Duty 5 Any other statutory taxes/duties applicable at actual Rate (INR per Ton of Coal) For 1 st Operating Year * # # Washing yield of 77.5% will be considered only for Bid evaluation purpose. Washing yield for payment of Coal Mining Services Fee will be based on Washeability Test Report from Central Institute of Mining and Fuel Research (CIMFR) or any other reputed agency. * The shaded variables shall not be considered for evaluation of bids, and shall not be filled by the bidders in the financial proposal. These costs shall be reimbursed by GMDC on actual on production of documentary evidences From 2 nd Operating Year till the exhaustion of Coal reserve at mine or term of Coal Mining Services Agreement, whichever is earlier, the following shall be applicable: (a) Coal Mining Services Fee as quoted for the 1 st Operating Year shall be escalated in each subsequent Operating Year based on CERC Formula for Escalation Rate for Captive Coal Mine Source (For Evaluation) (formula is provided in Chapter 21 annexed herewith). Page 24 of 101

25 (b) (c) (d) The escalation rate applicable for payment for an Operating Year shall be calculated 15 (fifteen) days prior to the start of the operating year and shall be notified by GMDC. In case Production Commencement Date falls in 1 st half of 1 st Operating Year i.e. 1 st April to 30 th September. The escalation of Coal Mining Services Fee will be applicable immediately from start of next Operating Year i.e. from 2 nd Operating Year. In case Production Commencement Date falls in the 2 nd half of 1st Operating Year i.e. 1 st October to 31 st March. The Coal Mining Services Fee will be same till the end of immediately next Operating Year i.e. 2 nd Operating Year and escalation of Coal Mining Services Fee will be applicable from start of an Operating Year thereafter i.e. from 3 rd Operating Year. Note: 6.17 If required and feasible, based on mineable reserve as per Geological Report, GMDC shall have the option to increase the annual washed coal quantity by 25% at the Coal Mining Services Fee quoted by Bidder and the option can be exercised by GMDC before signing of Coal Mining Services Agreement with successful Bidder Further both GMDC and successful bidder shall have option to increase/decrease the annual washed coal quantity by maximum 10% to be delivered in an Operating Year by giving at least a 60 days prior notice in writing before commencement of an Operating Year The successful bidder may undertake acquisition of land in phases, however, bidder shall ensure that coal production requirement of GMDC is met as per Mine Plan GMDC may transfer washery rejects to MDO at a mutual agreed price for management/use/disposal of washery rejects as per extant guidelines of Ministry of Coal or Ministry of Environment and Forest, Government of India and any benefit accruing out of this shall be appropriately reflected in the Coal Mining Services Fee quoted by MDO. 1. This Bid Document, along with its Annexure, is not transferable. 2. Though adequate care has been taken while preparing this Bid Document, the Bidder shall satisfy himself/itself on receipt of this Bid document, that the document is complete in all respects. Intimation of any discrepancy shall be given to the office immediately. If no intimation is received from any Bidder within ten (10) days from the date of issue of this document, it shall be considered that the issued Bid Document is considered as complete in all respects by the Bidder. 3. GMDC may modify, amend or supplement this Bid document if such a need arises in the future, prior to the Bid Deadline. In case of such changes thereof to the document, the Bidders to whom the Bid document has been issued shall be notified. Page 25 of 101

26 4. The Financial Proposal submitted by the bidders should be valid atleast for six months from the date of submission of the proposals. Upon evaluation and negotiations, the terms and conditions mentioned in this document and the coal mining services agreement, as agreed upon by GMDC and the successful bidder, shall be binding on both parties. 5. The Bid document does not constitute any binding offer or an agreement by GMDC. 6. This Bid document may be withdrawn or cancelled by GMDC at any point of time during the Bidding process, without assigning any reasons thereof. 7. This Bid document has been prepared in good faith, neither GMDC nor their advisors/consultants make any representation or warranty, express or implied, or accept any responsibility or liability, whatsoever, in respect of any statements or omissions herein, or the accuracy, completeness or reliability of information contained herein, and shall incur no liability under any law, statute, rules or regulations as to the accuracy, reliability or completeness of this Bid Document, even if any loss or damage is caused to the Bidder by any act or omission on their part. Page 26 of 101

27 Chapter 7: EVALUATION METHODOLOGY Methodology for Evaluating Qualifying Proposal 7.1 The methodology for evaluating the technical and financial capabilities of the Bidder shall be carried out based on the procedure stated below. 7.2 The Bidder can be a single Bidding Company or a Bidding Consortium. 7.3 In case of a single Bidding Company, all the financial and technical criteria shall be met by itself. 7.4 In case the Bidder is a Bidding Consortium, the Turnover, Profit and Net worth of the Lead member of the Bidding Consortium alone shall be considered for meeting financial criteria as per Qualifying Proposal Requirements. 7.5 The Bidder which is finally selected as the MDO shall be required to provide a Irrevocable Performance Bank Guarantee of INR 50 Crore issued by any Nationalised Bank or IDBI, ICICI, Axis, HDFC banks only in India and should remain valid for the entire contract period. The form and terms of this Performance Bank Guarantee are specified in this bid document. Notes: 1. The Specific gravity (tonnes / cubic meter) of coal and lignite shall be considered at 1.3 and 1.2 respectively and for overburden it shall be considered at All the financial figures (i.e. Net Worth, Profit and Annual Turnover) shall be as per the audited financial statements for the preceding three Financial Years. In case the audited financial results for the last preceding Financial Year is not available, certification of financial statements from an Accountancy Firm (the signatory shall be a Chartered Accountant) shall also be acceptable. Methodology for Evaluating Technical Proposal 7.6 The technical proposal shall be checked only for Responsiveness and shall not carry any weight in the final evaluation of the bids. Methodology for Evaluation of Financial Proposal 7.7 The financial proposal must be made in Indian Rupees. It shall be evaluated as under. 7.8 Coal Mining Services fee quoted by all Bidders for the 1 st year shall be compared. The Bidder quoting lowest Coal Mining Services Fee shall be selected as successful Bidder. Page 27 of 101

28 Chapter 8: SPECIFICATION, QUANTITY TO BE HANDLED, ANALYSIS OF COAL AND COMMENCEMENT DATE 8.1 The specification of washed coal to be loaded into transportation system at ex-washery stockyard shall be as under : Parameters Specified Values Rejection Value a) GCV (ADB) 4200 Kcal/Kg b) Ash Content (ADB) 32% More than 34% c) Total Moisture (ARB) Up to 10% --- d) Size of thermal coal - 50 mm GMDC shall accept above grades of thermal coal available and mined from the coal block. The Bidder shall arrange for washing/ beneficiation/blending, if required, to get Gross Calorific Value (ADB) of 4200 Kcal/Kg with Ash content (ADB) 32% & Moisture content up to 10 % (ARB). In case of any rejection of coal supplied, the Coal Mining Services Fees on coal shall not be paid or reimbursed. 8.2 QUANTITY TO BE SUPPLIED Bidder shall supply washed coal quantity equivalent to approx. 12 MTPA of Raw coal quantity to be mined at peak mining capacity as per Mining Plan. If required and feasible, based on mineable reserve as per Geological Report, GMDC shall have the option to increase the annual washed coal quantity by 25% at the Coal Mining Services Fee quoted by Bidder and GMDC can exercise the option before signing of Coal Mining Services Agreement with successful Bidder. Further both GMDC and successful bidder shall have option to increase/decrease the total washed coal quantity by maximum 10% to be delivered in an operating year by giving at least a 60 days prior notice in writing before commencement of an operating year. 8.3 PRODUCTION COMMENCEMENT DATE Bidder shall commence production of coal within 36 months after signing of Coal Mining Service Agreement. 8.4 PENALTY FOR SHORT SUPPLY As the coal has to be supplied to End Use Power Plant, bidder has to make necessary arrangements so that the Power Plant does not suffer due to short supply of coal. If the guaranteed quantity and quality of coal is not supplied, the bidder has to make necessary arrangements for supply of the shortfall quantity with same quality by any other source at the same loading point failing which a 5% of the Mining Service Fee/ Tonn shall be leviable. Page 28 of 101

29 Chapter 9: APPLICABLE PRICE, BASIS OF PAYMENT & PRICE ADJUST- MENT AND PAYMENT TERMS 9.1 PRICE APPLICABLE DURING CURRENCY OF AGREEMENT The price applicable during the currency of the Agreement shall be determined as follows: Applicable statutory charges, taxes, duties such as royalty, stowing excise duty, environment cess, service tax etc. shall be reimbursed on actual basis. GMDC shall not pay or reimburse income taxes payable by the bidder Bidder shall present documentary proof for reimbursement/recovery of charges mentioned above Coal Mining Services Fees per MT for the respective year shall be paid after adjusting for the quality parameters applicable as per Coal Mining Services Agreement Sampling and analysis of the coal shall be done at loading point near washery stock yard as per IS specifications In case of supply by road/ropeway/conveyor belt, a 5,000 Tons of coal supply from washery stock yard shall be considered as one lot for sampling or in case of supply by Railways each rake shall be considered as one lot for sampling. For adjustment of Coal Mining Services Fee, weighted average quality parameters of coal supplied during a fortnight shall be considered. 9.2 Coal Mining Services Fee Adjustment The Ash Content (ADB), Total Moisture (ARB) and GCV (ADB) of thermal coal would be checked and compared with the guaranteed values as indicated above. Adjustment of the Coal Mining Services Fee would be carried out for variation in weighted average quality parameters as compared to the guaranteed parameter values as per the following adjustment formula Ash Content (ADB): On sampling and analysis of coal, if the weighted average Ash content (ADB) in the coal supplied during a fortnight exceeds 32%, then for every increase in ash content by 1% on prorate basis, the weight of the coal supplied shall be reduced by 1%. Coal with Ash content (ADB) above 34% shall be rejected by GMDC and in case of any such rejection, no Coal Mining Service Fees for the specified lot will be paid or reimbursed and such lot will be excluded for determination of weighted average Ash content (ADB) during the fortnight. No bonus for ash content (ADB) below 32% shall be paid by GMDC to MDO. Page 29 of 101

30 9.2.3 Total Moisture (ARB): On sampling and analysis, if the weighted average Total moisture (ARB) in the coal supplied during a fortnight exceeds 10%, the weight of coal supplied shall be reduced by the same percentage by which moisture content exceeds 10%. However, no bonus / adjustment of weight shall be paid for the total moisture content (ARB) in coal is less than10% GCV (ADB): On sampling and analysis, if the weighted average Gross Calorific Value (ADB) of the coal supplied during a fortnight is above or below guaranteed value of 4200 kcal/ Kg, the Coal Mining Services Fee shall be adjusted on the entire quantity of the coal supplied during the fortnight as per the formula given below. Adjusted Coal Mining Services fee per MT = (A x B) / 4200 A = Applicable Coal Mining Services fee of Thermal coal for GCV (ADB) 4200 Kcal/Kg. B = Actual Gross Calorific Value (ADB) as per analysis and sampling ( IS specs) at loading point near washery stock yard. 9.3 BILLING AND PAYMENT TERMS: For the purpose of billing and payment, each lot/rake of thermal coal shall be treated as one consignment and processed for payment by witnessing and recording of weight of coal jointly by authorized representative of GMDC and MDO on weighbridge at loading point near washery stock yard. The payments shall be regulated as below on submission of related documents % payment of Coal Mining Services Fee for the weight of coal recorded at loading point near washery stock yard along with 100% reimbursement of Royalty, SED, environment cess, statutory taxes, duties shall be made directly to the MDO on submission of invoice alongwith documentary evidence in triplicate in complete manner within 15 days of coal supplied/loaded from washery stock yard Balance payment of Coal Mining Services Fee corresponding to the weighted average quality parameters for all coal supplied/loaded during the fortnight, after making adjustment for coal quality parameters and effecting recovery / releasing bonus corresponding to the quality of coal supplied, shall be released directly to the MDO within 15 days of submission of analysis reports by independent inspection agency jointly appointed by the GMDC & MDO Payment of Coal Mining Services Fees will be made by GMDC after deducting applicable taxes i.e. T.D.S, W.C.T. or any other applicable taxes on Coal Mining Services Fees. GMDC shall make payment of applicable service tax on Coal Mining Services Fees to MDO. Page 30 of 101