CHAPTER IV

COAL EXPLORATION


4.1. Regional and Promotional Exploration: Exploration for coal is carried out in
two stages. In the first stage, Geological Survey of India (GSI) undertakes Regional
Exploration of large areas to find out the broad availability of coal seams, geological
structure, reserves etc. on a continuous basis, confirming the prognosticated occurrence
of coal. Department of Mines provides fund for it. In order to supplement the efforts of
the GSI for Regional Exploration, services of Mineral Exploration Corporation (MECL),
GSI and CMPDI are taken for carrying out Promotional (Regional) Exploration in
various parts of the country. Department of Coal provides separate fund for this under the
plan scheme "Regional Exploration" for coal and lignite. The Sub-committee on Energy
Minerals (Group III of Central Geological Programming Board) with representatives of
GSI, CMPDI, MECL, Singareni Collieries Company Limited (SCCL), Neyveli Lignite
Corporation (NLC), CFRI etc., approves the programmes, coordinates and reviews the
Regional Exploration work. CMPDI also acts as a nodal agency for disbursement of
funds for promotional exploration besides carrying out technical supervision of the
promotional work of MECL in the coal and lignite.

4.2. Detailed Exploration: In the second stage, Detailed Exploration is carried out in
potential areas of small size identified through Regional/Promotional Exploration, as per
the requirements of Coal Companies. Such blocks are taken up for detailed drilling to
bring the reserves into Proved category and thus to reduce the uncertainties. The results
of Detailed Exploration are incorporated in Geological reports that lead to Mine
Feasibility Studies and formulation of Project Reports on mine planning. The reports are
used for exploitation of coal reserves considering factors like emerging demand, its
location, and availability of infrastructure for coal evacuation and techno-economics of
the mine development including coal quality.

4.3. The Detailed Exploration is funded by Coal Companies from its capital budget.
Central Mine Planning and Design Institute Ltd. (CMPDI) directly and in a limited
manner through State Govts., carries out detailed exploration in CIL command areas.
CMPDI is also conducting Detailed Exploration in Non-CIL blocks within the CIL
Command Area from fund provided by Department of Coal. The Detailed Exploration in
the command area of SCCL is carried out departmentally by SCCL.

4.4. Detailed Exploration in Non-CIL Blocks: In December 1996, 275 blocks were
earmarked for supporting CILs production needs till 2036-37 and 200(then 172) Non-
CIL blocks have been identified for coal production by others. Out of it, 136 blocks have
already been offered for allotment to private entrepreneurs for captive use.
CMPDI proposed to conduct exploration in Non-CIL blocks to enable private
entrepreneurs to readily locate prospective blocks and save 3-5 years in production
schedule by paying the cost. Departmental EFC of Department of Coal approved the
proposal of CMPDI to continue the scheme of Detailed Drilling in Non-CIL Blocks in X
Plan at an estimated cost of Rs.70.66 crore.

4.5. In November 2003, Ministry of Coal decided that henceforth all exploration in the
captive blocks would be done by CMPDI or under its direct supervision. No allocation of
a captive block will be done unless the block has been explored enough to base a mining
plan on the so available data (including assessment of extractable reserves). Ministry of
Coal further desired to have detailed exploration along with assessment of extractable
reserves carried out on priority basis in 15 identified captive mining blocks. To recover
the cost of such detailed exploration in the identified captive mining blocks from the
scheme of Detailed Exploratory Drilling in Non-CIL blocks, CMPDI has submitted a
Revised Cost Estimate of Rs.93.84 crores (Rs.70.66 crores original + Rs.23.18 crores
additional for 70,000m of priority drilling in captive blocks) to Ministry of Coal in
November 03. The RCE proposal for Detailed Exploratory Drilling in Non-CIL blocks is
under consideration .

4.6. Promotional Exploration: Sub-Group II on Coal & Lignite Exploration for
formulation of X Plan has recommended the continuation of scheme for Promotional
(Regional) Exploration in X Plan also. EFC, in its meeting held on 3.6.03, has approved
the proposed expenditure of Rs.275.80 crore in X Plan for carrying out 6.0 lakh meter of
drilling by GSI, MECL and CMPDI in coal and lignite, CBM studies in association with
promotional exploration and creation of coal and lignite resource information system. A
target of 1,20,300 meter of promotional drilling has been fixed by Sub-committee on
Coal & Lignite for 2003-04 in coal & lignite.

INVENTORY OF COAL RESOURCES OF INDIA

4.7. As a result of exploration carried out down to a depth of 1200m by the GSI and
other agencies, a cumulative total of 245.69 Billion tonnes of coal resources have been
estimated in the country as on 1.1.2004.

The state-wise distribution of coal resources and its categorisation are as follows:

STATEWISE RESOURCES OF INDIAN COAL
State Coal Resources in Million Tonnes
Proved Indicated Inferred Total
Andhra Pradesh 8091 6092 2514 16697
Arunachal Pradesh 31 40 19 90
Assam 279 27 34 340
Bihar 0 0 160 160
Chhattisgarh 8771 26419 4355 39545
Jharkhand 35409 30107 6348 71864
Madhya Pradesh 7513 8233 2914 18660
Maharashtra 4653 2156 1605 8414
Meghalaya 117 41 301 459
Nagaland 4 1 15 20
Orissa 14614 31239 15135 60988
Uttar Pradesh 766 296 0 1062
West Bengal 11383 11523 4488 27394
Total 91631 116174 37888 245693

4.8. Categorisation of Resources: The coal resources of India are available in
sedimentary rocks of older Gondwana Formations of peninsular India and younger
Tertiary formations of northern/ northeastern hilly region. Based over the results of
Regional/Promotional Exploration, where the boreholes are placed 1-2 Km apart, the
resources are classified into Indicated or Inferred category. Subsequent Detailed
Exploration in selected blocks, where boreholes are less than 400meter apart, upgrades
the resources into more reliable Proved category. The Formation-wise and Category-wise
coal resources of India as on 1.1.2004 are given below:

(in Million Tonnes)

Formation Proved Indicated Inferred Total
Gondwana Coals 91199 116068 37519 244786
Tertiary Coals 432 106 369 907
Total 91631 116174 37888 245693

Type-wise and Category-wise coal resources of India as on 1.1.2004 are given
below:
(in Million Tonnes)

Type of Coal Proved Indicated Inferred Total
(A) Coking :-
-Prime Coking 4614 699 - 5313
-Medium Coking 11391 11774 1889 25054
-Semi-Coking 482 1003 222 1707
Sub-Total Coking 16487 13476 2111 32074
(B) Non-Coking*:- 75144 102698 35777 213619
Total (Coking & Non-
Coking)
91631 116174 37888 245693

* Including coals of North Eastern Region.

4.9. Status of Coal Resources in India During Last Five Years: As a result of
Regional, Promotional and Detailed Exploration by GSI, CMPDI and SCCL etc, the
estimation of coal resources of India has reached to 245.69 Bt.



4.10. The estimates of coal resources in the country during last 5 years are given below:
(in Million Tonnes)
As on Proved Indicated Inferred Total
1.1.1999 79106 88427 41219 208752
1.1.2000 82396 89501 39697 211594
1.1.2001 84414 90242 39250 213906
1.1.2001(Revised 84414 98546 38023 220983
by Sub-Group-II)
1.1.2002 87320 109377 37417 234114
1.1.2003 90085 112613 38050 240748
1.1.2004 91631 116174 37888 245693

EXPLORATION ACTIVITIES OF CMPDI

4.10. CMPDI continued its programme of Detailed Exploration during 2003-04 also.
The emphasis has been on proving power grade and superior grade Non-Coking coals in
CIL and Non-CIL Blocks. A nominal amount of Promotional Drilling has also been
carried out in North Karanpura, Kamptee, Wardha Valley, Mand Raigarh, Makum and
Talcher coalfields. In November 03, Ministry of Coal desired to have detailed
exploration in 15 identified captive mining blocks on priority basis. Making changes in
the existing programme, CMPDI diverted its drilling resources to fulfill the task in 6
priority blocks by March 04 and allotted 4 blocks to MECL.

DRILLING


4.11. For the purpose of exploration of coal, CMPDI has largely deployed its own
drilling resources. The drilling resources of MECL and State Govt. of M.P., Chhattisgarh
& Orissa were deployed in a limited manner on contractual basis. On an average, 50 to 78
drills were operated by all agencies during 2003-04 as stated in subsequent table.

4.12. During the period under reference, exploratory drilling has been conducted in 94
blocks spread over 20 coalfields in the states of West Bengal, Jharkhand, M.P.,
Chhattisgarh, Maharashtra, Assam and Orissa. This includes detailed exploration of 19
Non-CIL blocks (CMPDI 15 and MECL 4) and promotional exploration of 8 blocks
by CMPDI. One more coalfield/block was explored for JSMDC consultancy work.

4.13. A total of 2,03,165 meter of exploratory drilling has been carried out by CMPDI
and its contractual agencies during 2003-04. The agency-wise performance of drilling is
given below:


Agency-wise Performance of Exploratory Drilling
During 2003-04

Agency Annual Target BE
2003-04
(m)
Achieved
2003-04
(m)
Average. No.
of Drills
Operated

Productivity
(m/dr/mth)
% Achiev.
against Annual
Target
CMPDI 1,91,500 1,71,638 43-48 321 90%
MECL Unscheduled 21,759 0-18 407 -
State Govts.
-M.P. &
Chhattisgarh
5,000 6,779 3-8 82 136%
-Orissa 5,000 2989 0-6 100 60%
Total 2,01,500 2,03,165 50-78 290 101%

Note: 1) Drilling by CMPDI includes 14,487m of Promotional Drilling, 79,619m of
Detailed Drilling in Non-CIL Blocks and 106m of drilling for Jharkhand
Govt.

2) MECL has carried out detailed drilling in four priority Non-CIL blocks.

3) Additionally, services of a private party were utilized to complete the
ongoing work of exploration in Sikni area of JSMDC. A total of 177m of
drilling was carried out for consultancy work.

4.14. During the period under report, CMPDI drills have recorded a productivity of 321
metre, per drill, per month. The overall productivity per drill per month for all agencies
has been 290m.

4.15. Coal Company command area wise and agency-wise details of exploratory
drilling for coal during 2003-04 are given in the table below:

Agency and Regional Institute-wise Exploratory Drilling: 2003-04

Agency Regional Institute/
Company
Command Area
Annual Target
BE
2003-04
(m)
Achieved
2003-04
(m)
% Achievement
against Annual
Target
CMPDI RI-I/ECL/MCL 23600 18190 77%
RI-I/NEC 2400 145 6%
RI-III/CCL 30000 26417 88%
RI-IV/WCL/MCL 32000 28203 88%
RI-V/SECL 53000 45605 86%
RI-VI/NCL/MCL 11000 13506 123%
RI-VII/MCL

39500 39572 100%
CMPDI TOTAL

191500 171638 90%
MECL RI-III/CCL Unscheduled 1826 -
RI-V/SECL Unscheduled 4797 -
RI-VII/MCL

Unscheduled 15136 -
MECL TOTAL

Unscheduled 21759 -
DGM(M.P./
Chhattisgarh)
RI-V/SECL 5000 6779 136%
DG(Orissa) RI-VII/MCL 5000 2989 60%

[Link]. TOTAL

10000 9768 98%
GRAND TOTAL 2,01,500 2,03,165 101%

Note: 1) CMPDIs Promotional drilling has been carried out: 236m by RI-III, 2022m by
RI-IV, 3320m by RI-V, 8764m by RI-VII and 145m by RI-I(NEC).

2) Exploratory drilling by CMPDI also includes 79,619m of Detailed Drilling in
Non-CIL blocks. MECL has also carried out 21,759m of detailed drilling in
priority Non-CIL blocks.

3) Additionally, CMPDI-RI-III has also carried out 106m of drilling for Jharkhand
Govt. CMPDI(HQ) has also utilised the services of a private party for
completing the consultancy work of JSMDC in CCL command area (177m of
drilling and GR submission).

4.16. Performance of Drilling in Non-CIL Blocks: Till November 2003, CMPDI was
conducting detailed exploration in Non-CIL blocks in routine manner. From December
03, the resources were diverted for exploration of identified captive mining blocks on
priority basis. The services of MECL were also utilized and a total of 1,01,378m of
detailed drilling was carried out in 2003-04. The agency, coalfield and block-wise
achievements is given below:

Agency Company
Command Area
Coalfield Non-CIL Blocks Meterage Drilled:
2003-04
CMPDI CCL [Link] Pakri Barwadih* 16,995
Rautpara 1,482
Kerandari 3,177
SECL Sohagpur Bodri North 2,396
Dhanpura 3,375
Bartara 730
Mand Pelma 10,808
Raigarh Gare IV/6* 2,144
Gare IV/8* 3,929
NCL Singrauli Chhatrasal 3,635
MCL Talcher Machhuakuta 3,393
Konark 315
Patrapada* 7,767
Utkal-E* 4,674
Radhikapur* 14,424
Ib Valley Jamkani* 375
Total Drilling by CMPDI in Non-CIL blocks: 79,619
MECL CCL West Bokaro Lalgarh* 1,826
SECL Hasdo Arand Nakiya* 4,797
MCL Ib Valley Jamkani* 10,125
Talcher Utkal F* 5,011
Total Drilling by MECL in Non-CIL blocks: 21,759
Total Drilling by CMPDI & MECL in Non-CIL blocks: 1,01,378

* Identified captive mining blocks for priority exploration.

4.17. Promotional Drilling by CMPDI: CMPDI continued the Promotional Drilling in
Koyad Kishanpur South block of North Karanpura Coalfield, Bharatwada block of
Kamptee coalfield, Area Between Tirap Colliery & Namchik River of Makum Coalfield
and has taken up new blocks viz. Madheri North West in Wardha Valley, Gare-IV/6 &
IV-8 blocks in Mand Raigarh and Radhikapur & Patrapada blocks in Talcher coalfields.
During the year 2003-04, 14487 meter of Promotional Drilling has been carried out by
CMPDI as detailed below:

Company
Command Area
Coalfield Promotional Blocks Meterage Drilled
2003-04
NEC Makum Area Between Tirap Colliery &
Namchik River
145


CCL North Karanpura Koyad-Kishanpur South 236

WCL Kamptee Bharatwada 993

Wardha Valley Madheri North West 1,029

SECL Mand Gare - IV/6 1,570

Raigarh Gare IV/8 1,750

MCL Talcher Patrapada 694

Radhikapur 8,070


Total Promotional Drilling by CMPDI 14,487




GEOPHYSICAL SURVEYS

4.18. CMPDI has carried out the following work during 2003-04:

a. Geophysical Logging: Boreholes drilled for exploratory drilling are logged by
Geophysical logging instrument to get the insitu information of different strata
encountered in the borehole. CMPDI carried out a total of 27,737 meter of
geophysical logging in 138 nos. of boreholes as per details given below:

Blocks Total Depth Logged
(m)
CIL 4957
Non-CIL 20325
Promotional 2455
Total 27737

Apart from it, MECL has also carried out 3297m of Geophysical logging in a
Non-CIL block.
b. Surface Geophysical Surveys: Electrical Resistivity and Magnetic surveys have
been carried out by CMPDI in CIL, Non-CIL and Promotional blocks for
delineation of incrops of coal seams, assessment of it geometry in shallow and
deep areas and identification of intrusive / basement formations. Following work
have been conducted during the year 2003-04:
Blocks Electrical Survey
Magnetic Survey
Profiling
(Line Km)
Vertical Electrical
Sounding (VES) (Nos)
(No. of Stations)
CIL - 18 200
Non-CIL 140.91 56 -
Promotional 17.00 2 3000
Total
157.91 76 3200

c. Ground Penetrating Radar (GPR) application for locating old abandoned
working (S&T Project: MT 110): This project has been undertaken by
National Institute of Rock Mechanics (NIRM) in association with CMPDI to
apply GPR technique to map the extent of old working around existing mines, and
determination of coal working from the surface etc. Final report has been
submitted by NIRM/CMPDI in January 2004.

HYDROGEOLOGICAL STUDIES

4.19. The Following Hydrogeological Studies have been carried out during the year
2003-04:

i) Hydrogeological investigation for NTPC to assess the impact of ash-haul-back
from TTPS of NTPC in South Balanda Opencast Mine (Talcher Coalfield) has
been completed and final report submitted.
ii) Hydrogeological investigation for NTPC to assess the impact of ash-haul-back
from STPS of NTPC in Gorbi mine (Singrauli Coalfield) is in progress.
iii) Hydrogeological studies for EMP in 6 project areas of BCCL areas, as per Xth
Plan Road Map, are under progress.
iv) Hydrogeological studies for preparation of revised EMPs of Piparwar OCP and
Ashoka OCP have been completed
v) As per Xth Plan Road Map, Hydrogeological studies for EMP in 8 project areas
of CCL has been completed and reports submitted. Studies are under progress in
18 other project areas.
vi) Permeability studies in Garhi reservoir area of Tandwa STPS (Govt. of
Jharkhand) has been completed and final report submitted.
vii) As per Xth Plan Road Map, Hydrogeological studies for EMP in 4 project areas
of WCL have been completed and 5 more projects are under progress.
viii) Hydrogeological studies in 5 project areas of WCL are in progress for production
support/project report preparation.
ix) Hydrogeological Reports of (1) Meera Incline, (2) Dhanpuri OCP, (3) Simaria
(Johilla Area) in SECL have been completed
x) Baseline data collection for Hasdeo Project in SECL is under progress.
xi) Drilling and construction of 11 piezometres in Bisrampur and Bhatgaon areas of
SECL has been completed and handed over to SECL.
xii) Hydrogeological investigations of Bartara Non-CIL Block, Sohagpur coalfield is
under progress.
xiii) Hydrogeological studies for EMP in 5 collieries and two OC projects of ECL
have been initiated.

GEOSYSTEMS

4.20. Following work has been carried out by CMPDI:

i) Computerized geological modeling of combined zone comprising Bhurkunda-
Lapanga-Chordhara blocks of SKCF for CIL R&D Scheme of CCL, coal
exploration in Sikni Mine Extn. area for Jharkhand State Mineral Development
Corporation and Amlohri block of Singrauli coalfield, were completed through
MINEX software.
ii) Final report on Coal Resources in CIL Mines/blocks and production needs
including broad based UNFC type of classification was submitted.
iii) On the Project on Integrated Coal Resources Information System under
Promotional Exploration during X plan, approved in principle by the EFC, the
following advance actions are being taken pending final approval.

NIT for borehole data capture is published in press and sale of tender
document is on.
The Indent for Software & Hardware items including specifications is
released for procurement.
Collection and compilation of basic data is in progress by the identified
teams of RIs and SCCL.
Design of database, system and software to aid seam correlation are in
progress.
Compilation of data of North-eastern coalfields for geological modeling is
in progress at CMPDI (Hq).
The committee of MoC, on screening of project proposals contained in
Coal & Lignite Promotional Exploration Programme in X plan (2002-07),
met on 12.02.04 and has accepted the proposal for approval.

iv) Support services to RI-VI, for processing the data of Utkal-E Captive block for
geological modeling, has been completed.
v) Mine processing activities of Kalayaneshwari OCP of Raniganj Coalfield is in
progress.
vi) Preparation of dockets for 50 captive mining blocks has been initiated.
vii) Additionally, brief report on geological resources and production details for
different coal companies has been completed, as desired by CIL.

DOCUMENTATION

4.21. During the year 2003-04, a total of thirteen Geological Reports have been
submitted under the regular exploration work of CMPDI. Apart from it, one Geological
Report on Sikni Mine Extn. area has been submitted for consultancy work of Jharkhand
State Mineral Development Corporation (JSMDC). Under priority exploration task of
Department of Coal in identified captive mining blocks, three Appraisal Notes have been
submitted in March 2004 and seven more are likely to be submitted in April 04.

RESERVE ESTIMATION

4.22. The 13 Geological Reports prepared in 2003-04, under regular exploration
programme, have estimated 2.55 Billion tonnes of coal resources. Out of it, 2.06 Bt (0.11
Bt coking) is under Proved category and 0.49 Bt (0.04 Bt coking) is under Indicated
category.

REMOTE SENSING

4.23. During the period under reference (April, 2003 to March, 2004) following jobs
were completed/under progress:

(i) Geostructural mapping of Kameng Hydroelectric project area based on
remote sensing data for North Eastern Electric Power Corporation
(NEEPCO) Ltd., Shillong, Meghalaya have been completed.
(ii) Land use/cover mapping of buffer zone of Hirabuddin Gold Mine,
Karanataka based on satellite data for IBM, Nagpur have been completed.
(iii) Report on identification of potential sites for gas based power station in
vicinity of Delhi for 3000 MW capacity based on remote sensing and GIS
have been submitted to Central Electricity Authority (CEA), New Delhi.
(iv) Report on identification of potential sites for pit-head, coal based thermal
power station in Talcher, Ib Valley, Mand-Raigarh, Korba, Singrauli,
Tatapani-Ramkola, North Karanpura and Rajmahal coalfields for 36000
MW capacity based on remote sensing data & GIS have been submitted to
Central Electricity Authority (CEA), New Delhi.
(v) Report on identification of potential coal blocks for additional 23,000
MW, pit-head thermal power generation have been submitted to Central
Electricity Authority (CEA), New Delhi.
(vi) Report on thematic mapping of Wardha Valley coalfield based on remote
sensing data of the year 1992 and 2002 have been submitted to WCL,
Nagpur.
(vii) Vegetation cover mapping of Talcher and Ib valley coalfields based on
satellite data is completed.
(viii) Land use/cover mapping of buffer zone of Khadia OCP, Gopalprasad
OCP, Hurilong UGP, Karo & Topa OCP based on remote sensing data
have been completed.
(ix) Land use/cover mapping of buffer zone of 16 mining projects of Central
Coalfields Ltd. is under progress for EMP.
(x) Geostructural mapping of Jharia & Raniganj coalfield based on high
resolution satellite data is completed for coal cleat study of CIL R&D
project.
(xi) Land use/cover mapping of buffer zone of Hingula. Expn, Samleswari
Expn Belpahar Expn, Amlohari Expn and Tetariakhand OCP is under
progress.

LABORATORIES

4.24. CHEMICAL LABORATORY

This laboratory has carried out characterization of coal on borehole cores from
sixteen blocks explored by CMPDI covering seven coalfields. During the period
from April, 2003 to March 2004, 4043.00 m of coal cores were processed and
10556 no. of samples were analysed for quality evaluation and its down stream
utilization.



4.25. PETROGRAPHY LABORATORY

This is the only laboratory in the country, which has been accredited by
International Committee for Coal Petrology (ICCP) for Vitrinite reflectance and
Maceral analysis. The analysis is carried out by experienced, specialized
professionals accredited by International Committee for Coal Petrology (ICCP).

During the year from April 03 to March '04, the laboratory has undertaken
Petrographic study (vitrinite reflectance and maceral analysis) on 260 coal
samples from 15 blocks/areas covering eight coalfields. The area covered
includes working mines and exploration blocks from different coal companies. In
addition, petrographic studies were undertaken on clean coal samples from CCL
washeries. Imported coals samples have been analysed as per International
Standard. The study of cleat samples from different working mines of WCL were
also undertaken.

One CIL R&D funded project entitled Characterization of cleats in coal from
Raniganj and Jharia Coalfield has commenced from the month June 02. The
project will generate data on coal cleats for different applications for CBM
industry and mine stability. The project is in progress as per schedule.

COALBED METHANE

4.26. As per Govt. of India CBM policy, consortium of CIL and ONGC has entered
into a contract with Govt. of India for the two allotted coal bed methane blocks one
each in Raniganj and Jharia coalfields. In accordance with the provision of the contract,
Joint Operating Agreement has been signed between CIL and ONGC for the two allotted
blocks. The Govt. of Jharkhand on 28.08.03 has granted requisite Petroleum Exploration
License (PEL) for the Jharia Block. The exercise for locating slimholes/wells to be drilled
in Jharia CBM block has been taken up with ONGC officials and the same have been
fixed. The field activities are expected to start from April04.

4.27. CMPDI delineated CBM Blocks and prepared corresponding Data Package for
Directorate General of Hydrocarbons (DGH) for the second round of bidding of CBM
blocks. The bidding has been concluded and blocks have been awarded to the successful
bidders.

UNDP/Global Environment Facility (GEF)- GOI Project- Coalbed Methane
Recovery and Commercial Utilisation

4.28. The demonstration project Coalbed Methane Recovery & Commercial
Utilisation was approved by the GoI vide. 34012/15/96-CRC dated 15.09.99, under the
S&T plan of MOC. The project, with an estimated cost of Rs 76.85 crores, is being
funded jointly by the Global Environment Facility(GEF)/ United Nations Development
Programme (UNDP) and Govt. of India (GoI). The duration of project is 5 years. The
project is under implementation w.e.f 15.9.99 jointly by Central Mine Planning & Design
Institute Ltd.(CMPDI) as main implementing agency and Bharat Coking Coal Ltd
(BCCL) as co-implementing agency, on behalf of the Ministry of Coal. Project sites are
Moonidih and Sudamdih mines of BCCL in Jharia coalfield.

4.29. Major development in the implementation of the project during 2003-04 (up to
March, 2004) are as under :

(i) Arising out of the bidding process undertaken by UNIDO during March-May,
2002, in which offers were received for 13 out of the 14 equipment packages re-
tendered, the UNIDO issued Award of Contract for the main package 11
Vertical Drilling Rig on 27.9.02 at a cost of US Dollars 2,035,522, excluding spare
parts and technical services, to the selected bidder, M/s GEFCO, USA.
Subsequently, upon receipt of the ONGCS share amounting to US Dollars 2.62
million (approx) as the 50% cost of the Hydraulic Fracturing and
Completion/Cementation Equipment, the UNIDO sent the final signed contract for
the total Vertical Drilling Rig package at a total cost of US Dollars 2,274,597, to
M/s GEFCO on 22.5.03 for their acceptance. M/s GEFCO conveyed on 3.6.03 their
decline to sign the contract, and instead offered to participate in a re-bid at a
different price. The UNIDOS Contract Committee recommended on 27.6.03 for
inviting fresh bids for the Vertical drilling Rig package No. 11. Fresh bids were
invited on 17.7.03 for this package, and the two offers received were evaluated and
finalised during 8-17 September 2003 at Vienna. UNIDO issued the signed contract
for this package at a total cost of US Dollars 2,241,821 (CIF Kolkata), which has
been signed on 5.11.03 by the selected bidder, M/s Crown Energy Technologies,
Canada. As per this contract, the ex-works delivery of the equipment is 120 days
from the date of the contract. However, on account of delays at Suppliers end, the
equipment is now expected to be despatched in April 2004.

(ii) One other equipment package, namely, Package 18: Casing, had to be re-tendered
by UNIDO in May 2003, due to the financial inability of the selected bidder to
execute the supply. UNIDO issued the Purchase Order at the total cost of US
Dollars 159,176 (CIF Kolkata) to the selected bidder, M/s Petro Tub, Romania, on
18.11.03, but the party has declined to execute the Purchase Order and have
requested a substantial price increase, and different terms of payment. Under this
situation, UNIDO re-bid this package in early January 2004, and the bids received
were evaluated during 16-20 February 2004, and order for supply is expected to be
placed in April 2004.

(iii) Ten (10) other equipment packages, required confirmation of validity from the
respective lowest bidders, as their original offers were more than one year old.

In accordance with the modalities discussed and agreed with UNIDO during 8-17
September 2003 at Vienna, the UNIDO sent requests to the lowest bidder, M/s
Sonal Enterprises, USA for the confirmation of validity extension for a period of 90
days (from the date of their reply), for four packages. UNIDO conveyed on
21.10.03 that as M/s Sonal have requested an increase of minimum 5% on the
originally quoted prices, and changes to the terms of payments, which are not
acceptable to UNIDO, these four packages will have to be re-tendered. UNIDO
confirmed that validity extension has been confirmed for Package 21 : Pumping
Equipment, by the lowest bidder, M/s Weatherford ALS, USA.

The equipment package 21, for which the lowest bidder confirmed validity
extension, was submitted to the UNIDOs Contract Committee for approval for
issue of order/award of contract. UNIDO conveyed on 29.10.03 and 4.11.03, that
their Contracts Committee has rejected the proposal for Package 21, on the grounds
that the validity of an offer after expiration was not specified in the UNIDOs
Procurement Manual, and extension of the validity of an offer is legally not
possible, and recommended for a fresh bidding exercise. This decision of the
UNIDOs Contract Committee rejecting the Package 21 equipment proposal has
had a direct impact on five other equipment packages, including four UG packages.

Thus, on account of the above, out of a total of ten surface and UG equipment
packages, the UNIDO has invited fresh bids in the first phase for the six mainly
surface packages on 12.12.03 with the bid submission date of 23.1.04 to UNIDO.

Bids received for the six packages were evaluated during 16.2.04 to 20.2.04 at
Vienna, and orders are expected to be placed by UNIDO during April 2004. The
TORs for the four UG packages and two new packages have been finalised, and
these six packages are expected to be tendered by UNIDO in April 2004.

(iv) Arising out of the earlier bidding process undertaken by UNIDO in October, 2001,
eight equipment packages ordered by UNIDO, have been supplied and received
including one incomplete, till May, 2003.

The total order value of the above eight packages is US Dollars 5,698,607. This
includes the two packages procured under 50:50 cost co-sharing with ONGC.

(v) A proposal for re-appropriation of funds to the tune of US Dollars 1.097 million, to
bridge the gap between the budget provision and the fund requirement for
procurement of international equipment, has been cleared by the DEA, Ministry of
Finance, vide letter no. 7/2/2003-FB VIII dated 21.5.03 communicated vide letter
No. 34012/15/96-CRC (Vol-13), dated 30.5.03 of the Ministry of Coal. A meeting
has been held between the MOC and DEA officials on 9.12.03 for the finalisation
of the modality for transfer of fund in Rupees (equivalent to US Dollars 1.094
million) from the GOI (Cash) S&T contribution of the project to UNIDO/UNDP in
US Dollars for equipment procurement. As decided in the review meeting at the
Department of Coal on 24.2.04, the re-appropriation proposal is under process at
the Department of Coal for approval for implementation.

(vi) The RCE (March 2003) of the project has been approved in the 36
th
SSRC meeting
on 27.5.03, at the revised cost of Rs. 94.999 crores together with the revised date of
completion of February 2006. The updated RCE (Jan04) of the project is under
consideration.

(vii) Out of the four laboratory equipment packages re-tendered by CMRI,

a) the Package 36 : Field Desorption Apparatus , has been finalised and CMRI
has issued the Purchase order on M/s RMB Earth Science Consultants Ltd.,
Canada, and the confirmation of the party is awaited.

b) the Package 38: Gas Chromatography System upgrade has been ordered on
M/s Toshniwal Instruments (India) Pvt. Ltd, Kolkata and is expected to be
supplied by June04.




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