S. No. Salient Features Details 1. Duration and Lock-in
(a) The Agreement shall come into force from the date of its execution and shall be valid for a term of 5 (five) years from the date of signing of the Agreement. Upon expiry of the aforesaid period of 5 (five) years, the Agreement may be extended for a further period of 5 (five) years on mutually agreed terms.
(b) The Agreement shall have a lock-in period of 2 (two) years.
2. Exit Options (a) Post the expiry of lock-in period, the Successful Bidder may seek an exit after serving a prior written notice of 3 (three) months.
(b) If the Successful Bidder exits the Agreement prior to expiry of the lock-in period of 2 (two) years, the Performance Security shall be forfeited in its entirety and the Successful Bidder shall be disqualified from participating in the immediately subsequent tranche of auction for the non-regulated sector conducted by CIL.
3. Performance Security
(a) The Successful Bidder shall submit a Performance Security in accordance with Clause 7 of the Scheme Document.
(b) The Performance Security shall be forfeited inter alia in the event of termination of the Agreement (resulting from clauses (d) to (g) of the termination events (as provided herein below in item 10).
4. Price of Coal and Periodic Payments
The price of the coal and other periodic payments shall be as specified in Clause 3.9 of the Scheme Document.
5. Quantity and Compensation
for short delivery/ lifting
(a) The schedule of the supply of the Allocated Quantity to the Successful Bidder shall be determined under the Agreement.
(b) If level of delivery by the relevant Subsidiary or level of lifting by the Successful Bidder falls below 75% (seventy five per cent.) then the defaulting party shall be liable to pay compensation to the other party in the following manner:
Level of Delivery/ Lifting of Coal in a Year
Percentage of Penalty for the failed quantity (at the price payable under Clause 3.9 of
the Scheme Document) Below 75% but up to 70% of
Allocated Quantity
0 -5
S. No. Salient Features Details Allocated Quantity Below 65% but up to 60% of Allocated Quantity 10-20 Below 60% 20-40
The penalty shall be computed in the same manner as done slab-wise for computation of income-tax. However, unlike income tax, the percentage of compensation shall grow on a linear basis within each slab.
6. End Use of Coal
The Allocated Quantity supplied pursuant to the Agreement shall be for the utilisation only in the Specified End Use Plant.
7. Sources of Supply
The primary and secondary sources of supply of the Allocated Quantities shall be as specified in Annexure VI.
8. Grade
Variation
In case of a variation of grade of coal (decided on the basis of third party sampling) as compared to the Allocated Quantity grade, Bidder shall pay the Notified Price (or the latest Indexed Notified Price as the case may be) of the supplied grade plus the Winning Premium (in percentage terms) on the Notified Price (or the latest Indexed Notified Price as the case may be) of the supplied grade, without factoring in royalty payments, taxes etc.
Illustration:
Allocated Quantity grade G6
Notified Price/ Indexed Notified Price (Rs./ Tonne) (B) 2,280
Winning Premium (Rs./ Tonne) (C) 300
Winning Premium as % of Notified Price/Indexed Notified
Price (D=C/B) 13.16
Actually Supplied Grade G7
Indexed Notified Price of Supplied Grade (Rs./ Tonne) (E) 1,920 Premium of Supplied Grade (Rs./ Tonne) (F=E*D) 252.63 Price Payable for G7 Grade (Rs/Tonne) (I = E+F) 2,172.63 A similar procedure to calculate the applicable price will be followed in case of a grade upgrade.
9. Termination Events
The Agreement may be terminated inter alia in the following events: (a) Failure of a party to perform its obligations under the Agreement
because of a Force Majeure (to be defined in the Agreement), for a period beyond 90 (ninety) days in any continuous period of 180 (one hundred eighty) day;
(b) Successful Bidder being prevented/ disabled under Applicable Law from using coal, for reasons beyond their control, owing to changes in
S. No.
Salient Features
Details
applicable environmental and/ or statutory norms;
(c) Any material change in the coal distribution system of the relevant subsidiary of CIL due to a Government directive/ notification, at any time after the execution of the Agreement;
(d) The Successful Bidder resells, transfers or diverts the Allocated Quantity other than for use in the Specified End Use Plant;
(e) In certain events of encashment of the Performance Security or suspension of coal supplies;
(f) In the event a party suffers insolvency, appointment of liquidator (provisional or final), appointment of receiver of any of material assets, levy of any order of attachment of the material assets, or any order or injunction restraining the party from dealing with or disposing of its assets;
(g) A party commits a breach of terms or conditions of the Agreement; and/ or
(h) Such other situations as may be specified in the Agreement
10. Change
in Control
Any change in Control of the Successful Bidder and/ or any transfer of the Specified End Use Plant along with the rights in relation to the Allocated Quantity shall be undertaken as per the provisions of Clause 5.2 of the Scheme Document and as per the procedure and subject to the conditions set out in the Agreement.
11. Independent Third Party Sampling
Each Successful Bidder off-taking coal via rail mode may choose an agency from the following:
list of independent third parties provided by CIL from time to time or
CIMFR or CIMFR appointed agencies.
Bearing logistical issues, in case of Off-take of coal via road mode, a single independent third party sampling agency will be appointed by respective CIL subsidiary for sampling coal supplied to various purchasers from a particular source.
Third party sampling, if requested by the Successful Bidder, shall be done from the delivery/ loading point at supplier’s end and the costs in this regard shall be borne equally in case of transport via rail mode and in case of transport via road 50% of the cost of Third Party Sampling will be borne by respective CIL subsidiary and the residual 50% cost shall be shared by the parties who have requested for Third Party Sampling on a proportionate basis.
The procedure for conduct of Third Party Sampling shall be as detailed in the Agreement.
12. Lifting of Allocated Quantity for
In case the Successful Bidder (with respect to a rail mode) is unable to lift the scheduled quantity due to shortfall in the quantity necessary for formation of rake for transportation through rail mode, the balance
S. No.
Salient Features
Details
rail mode scheduled quantity will be carried forward to the subsequent month(s)/year(s). As and when such carried forward quantity is adequate to form a rake for transportation through rail mode, the same shall be supplied to the Successful Bidder. If at the end of the term of the Agreement, any residual scheduled quantity remains (including any quantity which has been carried forward as aforesaid), the same shall be dealt with in the following manner:
- In case the residual quantity is less than 2000TPA, such quantity will lapse.
- In case the residual quantity is 2000TPA or more, bidder will be supplied with the quantity equivalent to one rake.
13. Performance Incentive
There shall be no performance incentive under the Agreement
14. Indemnification The relevant Subsidiary shall be indemnified by the Successful Bidder for any claims or action that may arise inter alia on account of any misrepresentation of the Bidder misrepresentation, unwilling or otherwise.
Annexure II – Format of Undertaking