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Earmarking the terms and conditions for the successful bidders of the coal blocks in the upcoming e-auctions, the government released the Coal Mine Development and Production Agreement (CMPDA).
Among the several provisions are compliance orders relating to health, safety, welfare, social security and minimum wages for the workers.
The successful bidders are also mandated to report periodically to the nominated authority and state governments during the various stages of mining.
“The successful bidder shall conduct mining operations at the coal mine in accordance with the milestones or “Efficiency Parameters”. Failure to comply with the efficiency parameters would result in appropriation of the performance security,” said Vivek Bhardwaj, nominated authority for conducting coal block e-auction.
The provisions of the CMPDA would also be included in the mining lease. The agreement would also keep into account the events of ‘Force Majeure’ and anti-corruption provisions.
The conditions for performance bank guarantee and the format for the same is made part of the CMPDA. The bidders who win the coal block would have to provide performance security (bank guarantee) which will be aggregate of one year royalty and annual peak rated capacity of mines multiplied by final price offer made by the bidder.
"The agreement provides for conditions of vesting and non-compliance with the provisions of the CMPDA to result in withdrawal/cancellation of vesting order,” said Bhardwaj.
The agreement also has provisions of warrantees and indemnities by successful bidder. A clause containing list of event on which the agreement may be terminated, viz. failure to pay upfront amount and additional levy, non-compliance with anti-corruption laws, failure to pay monthly payment, etc.
