Moreover, putting the blocks under a separate SPV would also ensure option of retaining existing contractors engaged while owners of the blocks could be retained also as workers engaged by contractors currently employed in these blocks, he said.
If the coal blocks were to be put directly under CIL, new contractual agreements would have to be drawn up between CIL and mine contractors while differentials of higher wages of CIL mine workers and that of contract workers at the blocks risked industrial relations issues, the official added.
CIL would shortly appoint consultants to advise it of taking over the 40 coal blocks and integrate them with existing operations since most these blocks were in close proximity of the miner’s existing assets across the country, the official said.
The company would shortly float tenders to invite consultants to be chosen through competitive bidding and given the mandate to take stocks of the coal blocks including inventories, management processes, legal scrutiny of existing agreement with contractors already engaged, and manpower requirement for the period the blocks were under management and ownership of CIL, and subsequent auction of the blocks, if so decided by the Indian government at a later date.
The 40 coal blocks de-allocated and to be transferred to CIL, were captive fuel sources allocated to 20 private companies and 20 government owned companies in cement, steel and power sectors. On August 24, India’s Supreme Court ordered de-allocation of 214 coal blocks of the 218 blocks allotted to various user industries since 1993 on grounds that the allocation process was “arbitrary and illegal.”