Time runs out for Goa’s coal block plans

PANAJI: The Centre has all but terminated the allotment of the Dongri Tal-II coal block to Goa Industrial Development Corporation (GIDC) after the state government failed to develop the coal mine and pay the Rs 163.95 cr performance guarantee. The Union coal ministry had granted GIDC a “final” deadline of September 30 to appoint a mine developer and operator (MDO) and commence extraction of coal.
Though GIDC did float a request for proposal for the mine, just one bid was received for the coal mine, which has a 21-year life and which GIDC values at Rs 1,544 crores.The single bid was rejected as it failed to meet the required norms, said officials.

“We have time till September 30 to either get a bidder or pay the performance guarantee of Rs 163.95 crore. The matter has been put up for the board meeting on Friday. It is now for the board and the government to decide,” said an official.
This would be the second time that Goa’s ambitious plan to mine and sell coal has hit a dead-end. Though the Dongri Tal-ll coal block was allocated to GIDC in September 2019, major milestones for the coal mine were missed as the state government dragged its feet in complying with norms laid down by the coal ministry, said sources.
The Dongri-Tal II coal mine, at Singrauli in Madhya Pradesh, has a 2.9 million tonnes per annum (MTPA) capacity, but the state’s attempts to exploit the coal mine have been thwarted by “political tussles”.
Despite hiring a private consultant, the Goa government has not only failed to meet its deadline to select a mining contractor for its coal block in Madhya Pradesh; GIDC has yet to seek a further extension from the coal ministry, which usually takes a month to be granted.
GIDC issued the tender to appoint a MDO for the coal mine in March, with the Centre’s deadline about to lapse. GIDC did organise a pre-bid meeting with potential coal mine developers, where 10 interested firms participated.
The Dongri Tal –II coal block has been allotted by the Union ministry of coal for commercial mining to GIDC, and as per the terms of the allotment agreement, which was signed in October 2019, at least 25% of the coal extracted in a financial year has to be sold to the MSME sectors in Madhya Pradesh and balance to other buyers across India.
The MDO will have to submit a performance guarantee of Rs 77.2 crore, along with an additional performance guarantee of Rs 163.9 crore, which is equivalent to the performance security that GIDC has to submit to the Union ministry of coal.