CIL to award contracts for 7 mines by year end

State-run Coal India is likely to award the turnkey contract for its Rs 2,500-crore project to develop seven underground coal mines with an estimated reserve of over 400 million tonnes by the end of this year.

"We are holding meetings with the short-listed companies and in most likelihood would award the contract by end of the calender year," Coal India Ltd (CIL) Chairman Partha S Bhattacharyya told PTI.

In all, 17 companies had in June last year submitted expressions of interest for developing the seven underground mines of CIL.

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

Bhattacharyya said CIL has decided to relax some of its notice inviting tender (NIT) norms for the companies to ensure their good participation in the final tendering process.

Making changes in the earlier clause of seeking a bank guarantee for 15 years, CIL has decided to ask for an annual guarantee, which would reduce the upfront fees of contractors. The guarantee would be renewed annually.

CIL would also make changes to its retention fee clause and will ask for five per cent fee in form of a bank guarantee instead of cash.

Navratna PSU CIL plans to produce 100 million tonnes of coal from its underground operations by 2016-17. Bhattacharyya said the company would produce about 20 million tonnes of coal per annum from the seven underground mines.

All the seven underground mines are spread across Jharkhand and West Bengal and falls under the jurisdictions of CIL subsidiaries like Central Coalfields, Eastern Coalfields and Bharat Coking Coal.