The APMDC has floated a tender for Beach Mineral Mining leases. It contain lot of conditions to avoid small mining companies in the tender. For example the tender form cost itself Rs.5 Lakhs. Along with tender submission Rs. 10 Crore to be deposited. The successful bidder should deposit Rs. 100 Cr within one week. So no Indian private mining companies can participate in the above said tender. Only mega corporate company alone will participate along with some shell companies and take the tender, then they give sub-lease to other people as done in other projects. So this will violate MMDR Act and the mining employees code will not be complied.
To protect our employees we have send the suggestion to the Judicial Review Judge to modify the tender conditions. So that, lot of beach mineral employees will get benefit. Copy of the mail send to the Judge Judicial Review is posted below for our members information.
Date : 04.10.2023
The Hon’ble Judge, Judicial review,
Camp Office : Government Guest House (R&B Inspection Bungalow)
Collector’s Bungalaw Road,
Andhra Pradesh – 522 004.
Sub : Humble request to intervene and to revisit the Proposed Tender for selection of project Developer and Operator (PDO) for Planning, Engineering, Financing, Construction, Development, Operation, & Maintenance of an integrated beach sand mineral (BSM) Project in Andhra Pradesh – project to make the state rich and to generate employment and to avoid monopoly to a single company – reg.
Ref : Serial No. 2 in Judicial Review Website – Selection of Project Developer and Operator(PDO) for Planning, Engineering, Financing, Construction, Development, Operation, & Maintenance of an Integrated Beach Sand Mineral (BSM) Project by I&C, GoAP/APMDC.
We perused the above said proposal and would like to make the following impartial & unbiased suggestions pertinent to the development of BSM project and selection of PDO.
- The Tender form cost Rs. 5 Lakhs with GST is too high. No such highest rate has been fixed for any other tender floated by APMDC. This highest cost will prevent lot of small and medium scale entrepreneurs who have lot of technical knowledge and who could not be able to participate. Hence, it may be reduced to Rs.50,000 + GST.
- Along with submission of Tender form, it is asked Rs.10 Crore EMD to be deposited. This is also too high. It may be reduced to Rs. 50 Lakhs, so that lot of participants with vast technical knowledge will be inclusive and spread out participation. This sector generates appreciable rural employment in the economically backward district of Andhra Pradesh, where world class beach sand mineral deposits exists.
- For the successful bidder, it is mentioned that, Rs.100 Crore to be deposited within a week. This may be reduced to Rs.5 Crore or Rs.10 Crore bank guarantee, that allows many participants, otherwise only Mega Corporate Entities of no knowledge in beach sand mineral sector alone will participate with some shell companies and get the tender in their favour. This will tarnish the government’s image in the public and industrial sector. Previously also such a Joint Venture was arranged along with one Bothli Trade AG from Russia and G.O. was also issued. The net result was that it become a fiasco, no investment from Bothli has been materialised. These suggestions are given as we have long experience in the sector in mining, mineral separation and marketing of beach sand minerals in the domestic as well as export market.
- The Central Vigilance Commission (CVC) has already issued many guidelines for floating Tenders by Government Companies. These guidelines are not followed by APMDC in this particular Tender.
- As per section 17A(2B) of MMDR Act for Joint Venture, 76% should be with Government Company. This is the statutory requirement. On this aspect also, this tender document is not in accordance with the statute / special act.
- The Tender document is defective with the lacunae as hereunder :
- The “technical criteria” strangely covers only the mining, whereas the tender proposal covers the Desliming Unit (‘DSU’), Wet Concentrator Plant (‘WCP’), Mineral Separation Plant (‘MSP’) and Value addition plant (VAP). The “technical criteria” stated in the tender, therefore not adequate and is narrow scope.
- The Price Offer pertaining to the Value Addition Plant (VAP) is vague, subjective and not transparent defeating the very objective of a fair tender process. The following term is noticed in the Tender – “PDO will charge processing fees which will be mutually agreed between PDO & Owner” which makes it a very subjective and opaque of the tender process.
- The upfront Offer of mineral production share with the owner is minimum 8% of separated minerals produced from MSP which is totally contradictory with the provisions of MMDR Act, 1957. As per section 17A (2B) of MMDR Act, “Where the Government company or corporation is desirous of carrying out the prospecting operations or mining operations in a joint venture with other persons, the joint venture partner shall be selected through a competitive process, and such Government company or corporation shall hold more than seventy-four per cent of the paid-up share capital in such joint venture”.
- The owner is proposing to adopt single production share as Price offer for all 16 mineral deposits. Adopting single production share for all the 13 mineral deposit is illogical and technically inappropriate since all 16 Mineral Deposits have varying mineral contents and waste gangue minerals composition. It is possible that some of the better-quality deposit may enable a better profit share when compared to poor quality deposits and hence it is unfair to combine all deposits into an identical production share criterion. The owner is planning to adopt the single production share for the 3 Mineral Deposits (already approved by the Central Govt.) and for the future identified 13 Mineral Deposits by signing supplementary Agreement. This hypothetical and speculative approach is irrational, vague and annuls the fundamental objective of a fair tender process.
- It may kindly noted that part of the lease area had not been explored till date. Towards this, additional exploration will have to be undertaken, after LoI is obtained from GoAP, to establish the final quantum of reserves in the leases. Hence, offering the Production Share as Price Offer for the partially explored areas, as in the tender proposal is technically inappropriate. The resource potential for the part of the area for which quantum of reserves are not precisely defined, amounts to an unfair and ambiguous tender proposal, which is speculative , hypothetical and fraught with technical uncertainties and akin to gambling. Such an ambiguous tender proposal is unfair and opaque for serious genuine bidders.
- It is strange to observe in Technical Criteria, the experience of the Bidder is exclusively restricted to developing and operating a mine allotted by a Central/ State Government Company in India. Thus, the conditions of the technical criteria are partial, illogical and restrictive. A fair and open participation by all private mining companies having reasonable technical experience and financial stability will provide equal opportunities to all bidders from private sector mining and must be included keeping in view the principles of equal representation and equal opportunities to private and public sector in offering competitive bids.
- There are about 25 mining companies who are already in the HMBS Mining field. The tender has to be suitably modified (both technical criteria and financial criteria) in order to broad based the participation of all the above 25 companies. Their participation will play vital role for the success of the Tender due to the following reasons:
- Competent to deploy latest and costliest equipment with special knowledge and experience in operating them, in the field of Mining, Mineral Separation and Value Addition.
- Competent to deploy technically skilled manpower with special knowledge and experience in the fields of Mining, Mineral Separation and Value Addition.
- In the tender, the evaluation of Price offer pertaining to developing & operating a Mine and developing & operating a Mineral Separation Plant is by closed bid method. Whereas the evaluation of Price offers pertaining to developing and operating a Value-Added Plant is by open bid method. It is requested to follow either by closed bidding or open bidding method towards evaluation of Price bid in the tender. Also requesting not to incorporate both closed bidding and open bidding in a single tender, in order to have transparency and fair Tendering Process.
For Southern Region Mines and Mineral Based workers welfare Association
- The Hon’ble Chief Minister of Andhra Pradesh, 1st building, Government Secretariat, Velagapudi, Tulluru Mandal, Guntur – 522 237.
- The Chief Secretary of Andhra Pradesh, Velagapudi Secretariat, Second block, Velagapudi, Tulluru Mandal, Guntur – 522 237.
- The Secretary to Government, Industries & Commerce Department, Velagapudi Secretariat, Second Block, Velagapudi, Tulluru Mandal, Guntur District – 522 237.
- The Director of Mines and Geology, Department of Geology and Mining, D.No. 7-104, 5th Floor, Sri Anjaneya towers, D-Block, Ibrahimpatnam – 521 456, Krishna District.
- The VC & MD, The Andhra Pradesh Mineral Development Corporation Ltd., D.No.294/MD, 100ft. road, Kanuru, Vijayawada – 521 137, Andhra Pradesh.
- The Secretary, Ministry of Mines, Government of India, Shatri Bhavan, New Delhi – 110 001.
- The Secretary, Department of Atomic Energy, Govt. of India, CSM Marg, Mumbai – 400 001.