Why is the Goa Govt. Dragging its Feet in Mining its Allocated Block in Madhya Pradesh?

New Delhi: 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, but has also sought a further extension for the purpose from the Union Government. The state government has now asked Union Ministry of Coal for more time in order to select a contractor – a Mine Developer and Operator (MDO) – after missing its deadline for a fifth time in a row on March 28.

At the same time, opposition parties in Goa have upped their ante against the Pramod Sawant-led BJP government over undue delay on the part of the consultant, a Nagpur-based private firm, to select the MDO. The consultant had been appointed on a nomination basis, giving a go-by to the bidding procedure, in order to expedite selection of an MDO. But while the appointment was made on November 4, 2020, the consultant floated a Request for Quotation nearly four months later, on March 3, 2021.

“The state government appointed the consultant on the basis of a single-tender through the nomination process. At the time of appointment the consultant was told that the tender for an MDO will be floated within ten days and the entire process will be completed within 60 days’ time. But nearly five months down the line the state government is yet to announce the name of an MDO. What then was the point in appointing a contractor without a transparent bidding process?” asked Goa Forward Party MLA Vijai Sardesai.

The Goa Industrial Development Corporation (GIDC) had been allotted the Dongri-Tal II coal block in Singrauli district of Madhya Pradesh in the second tranche of auctions by the Modi government following the Supreme Court’s landmark judgment in 2014, cancelling allotment of more than 200 leases. An agreement for the coal block was signed between the Goa government and the Centre on October 30, 2019. Since, the GIDC has not deposited the mandatory performance guarantee of Rs 163.96 crore with the Centre nor has it appointed an MDO to carry out the mining operations.

Once appointed, the MDO contractor will carry out all activities pertaining to mining operations of the Dongri-Tal II coal block. The activities will include mine planning, mine development, operation, coal extraction and coal transportation. The state government will, in turn, pay a fixed mining fee to the contractor in accordance with the agreement entered into by both parties.

In the year 2020 the Goa government sought five extensions from the Union Coal Ministry to either appoint an MDO or pay the performance guarantee for the coal block. Even as the state government failed to pay even the first installment of the performance guarantee sum till July 2020, a fourth extension was sought which was duly granted by the Central Government. With the deadline from the fourth extension period fast approaching, the government appointed the Nagpur-based consultant in November 2020.

However, the MDO was again not selected within the deadline and a fifth extension was granted on December 18, 2020. The fifth extension period lapsed on March 28, 2021, without an MDO having been appointed. As per a written reply in the Goa state legislative assembly, a sixth extension has been sought now.

On March 30 the Goa legislative assembly witnessed noisy scenes after the ruling BJP government refused discussions on the floor of the house on allegations about the apparent delay on the part of the consultant in appointing an MDO. Legislators belonging to opposition political parties alleged that the consultant was selected in a hurry without proper bidding and that the selection, instead of being done by the GIDC, was conducted directly by the top rung of the Goa government through its Public-Private Partnership Steering Committee.

Opposition MLAs reportedly rushed to the well of the house which forced the Speaker to halt proceedings and issue an adjournment. Independent MLA Rohan Khaunte along with Sardesai and other Goa Forward Party MLAs alleged that the manner in which the government shied away from discussing the issue on the floor of the house reeked of suspected irregularities in the appointment of the consultant. They further alleged that an MDO has been finalised through a backroom deal while the official announcement is yet to be made, an allegation vehemently denied by the Goa government.

Vishwajit Rane, Goa's Minister for Industries Trade and Commerce, has said that the state government had not allotted the coal block to any MDO yet. He also castigated opposition MLAs for casting aspersions on the intentions of the government. The government, meanwhile, awaits a further extension from the Union Coal Ministry.

The GIDC has said that coal extracted from the Dongri-Tal II block will be used for commercial trading as the mineral is of a high grade. Derrick P. Neto, Managing Director of GIDC, told Newsclick that Goa government was allocated Dongri-Tal II by the coal ministry after the allocation of the Gare Palma III coal block to it was nullified by the Supreme Court in 2014. Earlier, Dongri-Tal II belonged to the Madhya Pradesh State Mining Corporation but it never conducted mining operations there.

“The private firm was nominated as a consultant for GIDC because it has prior experience with Dongri-Tal II. It had been the consultant for Madhya Pradesh government too for this block. After the RFQ was floated, pre-bid meetings are now being conducted following which a tender will be issued for selecting an MDO. This process is underway at present. Allegations that an MDO has already been finalised, even before the completion of this process, are baseless. GIDC does not have the expertise needed to undertake the process of selecting an MDO, hence a consultant was appointed. A time frame had been set for the consultant for finalising an MDO. However, the process was delayed owing to the fact that a feasibility study had to be conducted first by visiting the coal block in order to determine its financial viability,” said Neto.

The writer is an independent journalist.