CIL to award contracts for seven underground mines in 6 months

NEW DELHI: State-run Coal India is likely to award the turnkey contracts for its Rs 2,500-crore project to develop seven underground mines with an estimated reserve of 400 million tonnes in six months, a top company official said.

"The process to award contracts for the underground coal mines would be completed in six months," Coal India Ltd (CIL) Chairman Partha S Bhattacharyya told reporters over phone on Friday.

CIL has finalised the NIT (notice inviting tender) norms and would be floating a limited tender within a fortnight to invite bids from the nine-shortlisted companies, he added.

In all, 17 corporates had in June 2008 responded to the expression of interest floated by the country's largest coal producer for developing the seven underground mines spread across its five subsidiaries in West Bengal and Jharkhand.

Among the companies short-listed for the project include Reliance Infrastructure, Walter South East Asia, Anglo American, Essel Mining and Essar Mineral Resources.

Navratna PSU CIL plans to produce 100 million tonnes of coal from its underground operations by 2016-17. It intends to produce about 20 million tonnes of coal annually from the seven underground mines.

To ensure healthy participation of companies in the final tendering process, the coal major has relaxed its NIT norms.

Instead of seeking a bank guarantee for 15 years from the companies roped in for the project, CIL has decided to ask for an annual guarantee, which would reduce the upfront fees of contractors. The guarantee would be renewed annually.