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Project Agreement

For

Deploying Longwall technology,

Development of Longwall Panels

And their Extraction

At

Kakatiya Longwall Project

PROJECT AGREEMENT

Between

The Singareni Collieries Company Limited (A GOVERNMENT COMPANY)

And

[NAME OF TPO]Date: XX -XX-XXXX

The Singareni Collieries Company Limited (A Government Company)________________________________________________________________

Agreement Between

The Singareni Collieries Company Limited (A Government Company) and [NAME OF TPO]

THIS AGREEMENT IS MADE ON THE …………. day of ……………. XXXX

BETWEEN

The Singareni Collieries Company Ltd., an existing company under the Companies Act, 1956 and having its registered office at Kothagudem Collieries, Khammam District, (Andhra Pradesh, India) hereinafter called “SCCL”, which term shall, unless excluded by or repugnant to the subject or context, include its successors and permitted assigns, of the FIRST PART.

AND

[NAME OF TPO], a company duly incorporated in [Name of the country where company is incorporated] and having its offices at [LOCATION OF OFFICE] (hereinafter referred to as [NAME OF TPO]), which term shall, unless excluded by or repugnant to the subject or context, include its successors and permitted assigns, of the SECOND PART.

The TPO and SCCL shall be individually known as a “Party” and collectively referred to as the “Parties”.

WHEREAS

A. The Singareni Collieries Company (SCCL) is a Government company with equity participation of 51% by Government of Andhra Pradesh and 49% by Government of India. SCCL is a profit making company and is paying dividend to its share holders for the last 6 years. The company with a history of over 119 years in coal mining is moving ahead to retain its leadership by taking proactive measures to meet the emerging challenges in the coal industry both in technical and financial terms.

B. KTK Longwall is a mine owned and operated by M/s. SCCL in Bhoopalpalli area, in Warangal district, with a view to deploy Longwall Mining Technology to produce not less than 2.75 MTPA. It is proposed to operate the mine with the concept of TPO (Technology Provider cum Operator), who can design & deploy suitable LW machinery, produce & deliver coal at a designated Transfer point on surface, on CPT basis, at a guaranteed rate of production with globally competent conservation measures and globally competent safety standards and practices.

_______________________________________________________________Project Agreement for KTK Longwall Project

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C. The LW Panel development and extraction in the mine is to be undertaken by the TPO in accordance with the Applicable Laws including but not limited to applicable provisions of the Mines Act – 1952, Coal Mines (Nationalization) Act, 1973, The Coal Mines Regulation – 1957, the Contract Labour (Regulation and Abolition) Act 1970 and all Mineral, Environmental, Labour laws and other regulations governing and applicable to the coal mining and industry.

D. It is proposed to operate the mine with the concept of TPO (Technology Provider cum Operator), who can design & deploy suitable LW machinery, produce & deliver coal at a designated Transfer point on surface, on CPT basis, at a guaranteed rate of production with globally competent conservation measures and globally competent safety standards and practices.

E. Consequently, SCCL had invited sealed tenders vide notification no. …….. dated ……. (the “Tender”) from eligible bidders for selection of a Technology Provider cum Operator (TPO), undertake all activities starting from, design of LW mining equipment, equipment selection for deployment of longwall technology, planning and development of the Mine, mining of Coal, transportation of coal up to designated point at surface.

F. [NAME OF TPO] participated in the Tender and has been selected as the successful bidder.

G. SCCL has agreed to appoint [NAME OF TPO] as “The Technology Provider cum Operator”. [NAME OF TPO] agrees to accept the appointment, and to carry out the coal mining operations including, the design of the Longwall machinery, get technology approved by DGMS and obtain other DGMS approvals for the working of the mine, mine development, coal extraction, deployment, operation and repair and maintenance of equipment, transportation of coal up to designated point at surface and the undertaking of peripheral activities in accordance with the terms and conditions as set out in this Project Agreement.

NOW, THEREFORE, in consideration of the agreement and covenants hereinafter set out, and intending to be legally bound hereby, the Parties hereto covenant and agree with each other as follows:


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DEFINITIONS AND INTERPRETATIONS

1.1. Definitions

When used in this Agreement, the defined terms set out in this Clause 1 shall, unless the context otherwise require, have the following meanings:

1.1.1 “Affected Party” shall mean the party whose performance obligations under this Agreement is affected due to the actions of the opposite party and/ or Force Majeure.

1.1.2 “Affiliate” means in relation to any Party, any entity, which directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with the Party. For the purposes of this definition, the term “control” means effective management control of the Party, including without limitation, control through the power to select a sufficient number of directors, or to appoint a sufficient number of senior managers to exercise control, or similar powers. Further a party shall be presumed to control another person or entity, if it owns 51% or more of the beneficial interest or the voting power of that person or entity.

1.1.3 “Agreement” or “Project Agreement ” means this Project Agreement (along with all Schedules and Annexures) comprised by the documents set out in Clause 2 of this contract document; as of the date hereof, as may be amended or supplemented in accordance with the provisions hereof.

1.1.4 “Annual Contracted Quantity” or “ACQ” means the quantity of Coal set out in Clause 8

1.1.5 “Applicable Laws” means any law, rule, regulation, ordinance, order, code, treaty, judgment, decree, injunction, permit or decision of any central, state or local government, authority, agency, court, regulatory body or other body having jurisdiction over the matter(s) in question, as in effect from time to time.

1.1.6 “Approvals” mean the DGMS approvals for various equipment, goods, components, apparatus and instruments to be used in the Kakatiya longwall Mine.

1.1.7 “Ash (ADB)” shall mean the ash percentage in the Coal on an air dried basis.

1.1.8 “Authority” includes any government or governmental, semi-governmental, administrative, fiscal or judicial body, local governing body, department, commission, authority, tribunal, agency or entity having jurisdiction over the subject matter(s) in question;

1.1.9 “BCM (bcm)” means bank cubic meters.

1.1.10 “Bid” shall mean the bid submitted by the TPO to SCCL dated ……… in response to the tender and subsequent correspondence between the TPO and


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SCCL in this regard, accepted by SCCL in relation to the matters set out in this agreement.

1.1.11 “BIS” means the Bureau of Indian Standards or any successor or any other similar organization mutually agreed to by the Parties, which performs substantially the same role as that currently performed by the Bureau of Indian Standards.

1.1.12 “Business Day” means a day other than a Sunday or a public holidays in India on which banks are open for business in Hyderabad.

1.1.13 “Certified (1st and 2nd Class) Mine Manager” means the person nominated by SCCL in accordance with the requirements of Applicable Laws and Regulations, and is in sole charge, subject to the direction, supervision and policies of SCCL and the provisions of this agreement;

1.1.14 “Change in Law” means:

(a) The enactment, adoption, promulgation, modification or repeal (including any change in interpretation or application by competent authorities), after the date of this Agreement of any Law applicable or enforceable in the state of Andhra Pradesh; or

(b) The imposition of any material condition on the issuance or renewal or continuation of any Government Approval after the date of the Contract; or

(c) The failure by any relevant Government Authority to issue or renew any Government Approval,

After the effective date that shall make it more burdensome or expensive for the TPO to meet its obligations herein.

1.1.15 “Claim” means any claim, notice, demand, debt, account, action, expense, cost, lien, liability, proceeding, litigation (including reasonable legal costs), investigation or judgment of any nature, whether known or unknown;

1.1.16 “Coal” means Coal as defined by the Colliery Control Order, 2000 but does not include Washery Rejects.

1.1.17 “Coal Mines (Nationalisation) Act” means the Coal Mines (Nationalisation) Act, 1973 by the Government of India (GOI) and all subsequent amendments made to the Act.

1.1.18 “Commencement Date” means the date on which the Work under the terms of this Agreement has commenced and shall be the date when all Conditions Precedent under Clause 3 have been satisfied.

1.1.19 “Commencement of Coal Production Date” means the date on which the first consignment of Coal is delivered at the designated point at surface. For the purpose, total coal quantity in the first consignment shall be calculated as the each day’s production requirement to achieve the annual production target on pro rata basis for the first year.


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1.1.20 “Completion” means the date when the TPO has carried out all work under the Agreement in accordance with the terms of this Agreement;

1.1.21 “Consignment” means each day’s coal delivered at the designated point at surface.

1.1.22 “Contract Price” means the price as agreed between [NAME OF TPO] and SCCL in accordance with the letter dated ……… from …………….. to ………, and which shall be determined in accordance with Clause 9 (for Adjustment of Rates) and Schedule of Rates

1.1.23 “Contract Representative SCCL” means the person from time to time nominated by SCCL to be its representative in accordance with Clause 28.1

1.1.24 “Contract Representative TPO” means the person from time to time nominated by TPO to be its representative in accordance with Clause 28.2;

1.1.25 “CIL” means Coal India Limited having its registered office at 10, Netaji Subhas Road, Kolkata 700 001, India or its relevant subsidiary.

1.1.26 “Coal Block” means the Kakatiya Longwall Block Peddapur and Gollapalli in Godavari Valley Coalfields which belongs to SCCL from which TPO shall mine the coal and deliver to SCCL under the terms of this Agreement.

1.1.27 “Delivery Point” means the Coal unloading facilities at the destination identified by SCCL for the delivery of Coal by the TPO under this agreement.

1.1.28 “Effective Date” means the date as mentioned in Clause 4.1 of this Agreement.

1.1.29 “Environmental Laws” means any legislation, regulation, judgment, by-law or proclamation (whether of a local authority, a State or Central Government) or common law which has as its object, purpose or effect:

(a) The protection of the environment

(b) The storage, handling or transportation of any waste, dangerous goods or hazardous material;

(c) The prevention, control, abatement or investigation of pollution or contamination or their effect;

1.1.30 “Event of Default” means the event leading to default by the TPO and/ or SCCL, excluding the events of Force Majeure and as defined in this document.

1.1.31 “Force Majeure” has the meaning given in Clause 32 of this Agreement;

1.1.32 “GOI” means the Government of India;

1.1.33 “Invoice” means an invoice raised by the TPO in accordance with Payment Clauses in this Agreement;

1.1.34 “Lenders” means collectively all of the entities (including banks, non-banking financial institutions, multilateral’s and export credit agencies if


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applicable) providing to the TPO, financing or political risk insurance under the financing agreements or otherwise, and any trustee or agent acting on those entities behalf.

1.1.35 “Management Plan” means the plan required under clause 12.2;

1.1.36 “MT” shall mean Million Tonnes.

1.1.37 “Mine Plan” means the plan described in Clause 19.

1.1.38 “Mining Lease” means the rights of excavation of coal from Kakatiya Coal Block which lies with SCCL.

1.1.39 “Mine” means the underground working from where coal being extracted forming part of the Coal Blocks area shall have the meaning as defined by the Mines Act, 1952;

1.1.40 “Mine Safety Management Plan” means the mine safety management plan as approved by the Certified Mine Manager in accordance with Coal Mines Regulations 1957;

1.1.41 ”Mining Concessions” means the mining lease’(s) granted under the Mines and Minerals (Development and Regulation) Act, 1957.

1.1.42 “Operating Year” means the Financial Year commencing from April 01 of each year to the March 31 of the following year.

1.1.43 “Pollution Control Clearance” means any clearance or approval issued by the Ministry of Environment and Forests, India (MoEF) and the State Pollution Control Board’s (SPCB) or any other body authorized to do so which are governed by the prevailing Environmental Laws in India;

1.1.44 “Power” means any right, power, authority, discretion or remedy;

1.1.45 “Progress Certificate” means the Progress Certificate issued by SCCL in accordance with Clause 26;

1.1.46 “Production Requirements” means the requirements as to quantity and quality for production of ROM Coal in accordance with the production schedules of the Mine Plan and as otherwise adjusted from time to time under this Agreement;

1.1.47 “Quarterly Contracted Quantity” or “QCQ” is the quantity of coal to be delivered by TPO at designated delivery point at surface in an operating quarter.

1.1.48 “ROM Coal” means Run of Mine coal from the Mine;

1.1.49 “Sampling Standards” means sampling and testing standards for Coal in accordance with the procedure laid down in BIS (436 Part I / Sec I), 1964, for Manual Sampling , BIS (436 Part I / Sec 2), 1976, for Mechanical Sampling and BIS (1350 Part I), 1984, for Proximate Analysis respectively. Method of sampling such as augur method or any other suitable method shall be decided by SCCL.


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1.1.50 “Site Strikes” means any strike or other industrial action which materially affects the TPO ‘s ability to perform the Work;

1.1.51 “Sub-Contractors” mean TPO’s sub-contractors approved by SCCL in terms of Clause 35.1;

1.1.52 “Technical Information” means all copyright, patents, designs or other intellectual property rights, techniques, process and know how of SCCL or TPO as the case may be.

1.1.53 “Term” means the period from the Commencement Date until termination as referenced in several clauses of this Agreement.

1.1.54 “TPO” means company/JV/Consortium of companies who has been appointed by SCCL to carry out the terms of this Agreement and includes the [NAME OF TPO] employees, agents, consultants or sub-contractors.

1.1.55 “TPO’s Employees” means the employees to be furnished by [NAME OF TPO] for the purpose of carrying out the Work as itemised and described in the Scope of this Agreement.

1.1.56 “TPO’s Technical Information” means all copyright, patents, designs or other intellectual property rights, techniques, process and know-how of the TPO.

1.1.57 “TPO’s Equipment” means the equipment to be furnished by [NAME OF TPO] for the purpose of carrying out the Work as itemised and described in the Scope of this Agreement.

1.1.58 “Work” means all work required to operate the Mine in accordance with this Agreement.

1.2. Interpretation

In this agreement unless the context otherwise requires:

(a) the headings are for convenience of reference only and shall not be used in and shall not affect the construction or interpretation of this Agreement

(b) (singular) words in the singular include the plural and words in the plural include the singular, according to the requirements of the context.

(c) (gender) words importing a gender include every gender.

(d) (include) a reference to “include”, “includes” or “including” means “includes but is not limited to;

(e) (corresponding meanings) where a word or phrase is defined, its other grammatical forms have a corresponding meaning;

(f) (legislation) a reference to any legislation or provision of legislation or a policy includes all amendments, consolidations or replacements and all regulations or instruments issued under it;


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(g) (successors and assigns) a reference to Party to a document includes that Party’s permitted successors, assignees, administrators and substitutes;

(h) (Business Day) where a day on or by which any thing is to be done is not a Business Day, that thing must be done on or by the next Business Day;

(i) (writing) a reference to a notice form, consent or approval of a Party and agreement between the Parties, means a written notice, consent, approval or agreement;

2. DOCUMENTS COMPRISING THE AGREEMENT AND PRECEDENCE OF DOCUMENTS

This Project Agreement consists of the following documents in decreasing order of priority to the extent of any inconsistency:

(a) any variation made in accordance with this Agreement, with the later variation having priority to the extent of inconsistency between variations;

(b) the Schedules, Annexure and other Attachments,

(c) this Agreement;

3. CONDITIONS PRECEDENT

3.1. Effectiveness of Agreement

This Agreement shall become effective after the Bank Guarantee referred to in Clause 6.1 has been submitted by the TPO within the specified time herein and subsequent signing of the agreement. Signing of the Project Agreement will signify the Effective Date for the purpose of this Agreement

3.2. Commencement Date shall be effected from the date when SCCL certifies and so declares, in consultation with the TPO, the completion of all of the following conditions precedent by the TPO:

(a) obtaining all the necessary clearances and Approvals for commencing development Work of the Mine.

(b) Deployment of the mine development equipments i.e. Road header or any other cutting technology without drilling & blasting and SDL with supporting equipments.

Commencement Date shall be effected within 180 days of Effective Date.

3.3. Commencement of coal Production at rated capacity shall begin within 90 days of Commencement Date.


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3.4. Best Endeavors

The Parties shall use their best endeavors and provide reasonable assistance to the other Party wherever possible to ensure the conditions precedent contained herein are satisfied expediently.

4. TERM OF AGREEMENT

4.1. Effective Date

This Agreement shall come into effect from the date it is executed subject to fulfilling the conditions precedent set out in Clause 3.1

4.2. Term of Agreement

This Agreement, unless terminated earlier in accordance with terms hereof or upon revocation of mining lease by competent authority, shall continue to remain in force until expiry of 13 years from the effective date or achieving a total production of 27.50 million tonnes of coal whichever is earlier. .

4.3. Commencement of Work

The commencement of all works mentioned in Clause 3.2 and elsewhere in this Agreement such as seeking approvals and clearances from DGMS etc. shall begin from the Effective Date. Any work carried out by the TPO prior to the commencement date of this Agreement shall be governed by the Scope of Works and the Terms of this Agreement.

4.4. Commencement of Coal Production

The production of coal shall begin from the production date, subsequent to the precedent conditions in Clause 3.2 and Clause 3.3 being fulfilled.

4.5. Extension of Agreement

The Term of this Agreement may be extended by the Parties through mutual agreement not later than one year before the expiry of the Term. The Parties may agree to extend the Term for such further period as they mutually agree. Unless otherwise agreed by the Parties the terms of this agreement, as relevant to the context shall apply during any extended Term.


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5. SCOPE OF AGREEMENT

SCCL’s RESPONSIBILITIES

5.1. Maintain Approvals

SCCL shall maintain all the approval like Mining license, Environmental clearance, forest clearance, license for the possession and use of explosives etc. except the approvals for which TPO shall be responsible under the terms of this Agreement.

For the approval from DGMS, TPO shall prepare a proposal which shall be presented by SCCL to DGMS. TPO shall be responsible to defend proposals made to DGMS for the approval of the technology to be employed and obtain DGMS permissions for the proposals made and that of equipment.

SCCL shall assist the TPO to ensure that all the necessary Approvals from DGMS are granted and maintained for the operation of the Mine throughout the Term of this Agreement.

5.2. Provision of Certified Mine’s Manager and other statutory officers

SCCL shall appoint a Certified Mine Manager and key personnel at all the statutory positions. For the purposes of this Agreement and unless notified otherwise, the Certified Mine Manager shall be SCCL’s Site Representative.

5.3. Non Obligation

SCCL shall not be obligated to provide any financial funding, share in funding capital, equipment, facilities or support services except as expressly provided for in this Agreement. No mobilization advance or allowance shall be extended by SCCL.

5.4. Additional Compensation

There shall be no additional compensation payable to the TPO for implementing SCCL directives for work that falls within the scope of work under this Agreement, except for a directive which gives rise to a change in the agreed Scope of Work.

TPO’s RESPONSIBILITIES


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5.5. Obtain Approvals

The TPO must, at its cost, obtain and maintain throughout the Term, all Approvals and Permissions from DGMS necessary for the implementation of technology and operation of the mine from the DGMS to perform the Work, except as defined within this Agreement.

TPO is responsible to defend proposals made to DGMS for the approval of the technology to be employed and obtain DGMS permissions for the proposals made and that of equipment. In case for any reason DGMS do not permit the methodology, this Project Agreement automatically gets cancelled. Consequent upon Scientific study, the protective works, if suggested, shall be carried out by TPO only.

SCCL shall assist the TPO to ensure that all the necessary Approvals from DGMS are granted and maintained for the operation of the Mine throughout the Term of this Agreement.

5.6. TPO Responsible for all Mining Operations

Except as otherwise expressly provided in this Agreement or as otherwise directed or agreed by SCCL, in writing, the TPO is responsible for all mining operations and remedial work in accordance with the Scope of Work and as agreed in terms of reference of this agreement.

5.7. TPO Responsible for Mine Ventilation

SCCL shall maintain and operate the main mechanical ventilator (MMV), of 3 lakh/ 150 m/sec (as measured in the fan drift) located on surface. It shall be the responsibility of the TPO to maintain the statutory ventilation requirements at the face and trunk roadways and make necessary arrangements for distribution and coursing of air at the face and at the sealed-off panels at his cost.

5.8. TPO responsible for the Mine Drainage

TPO shall be responsible for the drainage of gate road Drivages and Longwall face up to the main sump. Pumping from main sump shall be done by SCCL. SCCL shall on its own discretion locate and relocate main sump. It shall be liability of TPO to drain water upto the main sump so maintained.

5.9. TPO responsible for Mine illumination and providing Mine safety lamps

Required electrical power at 6.6 KV or higher shall be provided by SCCL free of charge at the surface sub-station. The TPO shall make arrangements to distribute and stabilize the voltage, if necessary, to counteract any fluctuations of drop on the voltage of the electricity supply. The TPO is required to specify total power


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requirements for all equipment proposed to deploy and specific power consumption. Further, the TPO shall ensure efficient transmission and use of electric energy at power factor not less than 0.9. If power factor goes below the minimum required to be maintained, TPO shall pay for extra power consumed.

It is the responsibility of TPO to maintain the illumination level in the mine according to standards prescribed by DGMS.

TPO shall also be responsible for construction and maintenance of safety lamp room according to standards. TPO shall maintain in good condition, atleast minimum number of safety lamps as required by applicable laws or as directed by DGMS and for efficient working of mine.

5.10. Safe Work Systems

TPO must develop safe work systems and seek the approval of SCCL following which such systems would be implemented on the Mine site. If any penalty or compensation is required to be paid to any one including workmen of TPO due to any accident or violation of the safety standards, TPO shall pay the same. The compensation shall be paid at the rate at which SCCL pay compensation to its workmen.

TPO shall provide Personnel Protective Equipment (PPE) to all its workmen and maintain them in good working order at its cost.

1.1. Security of Mine

TPO shall ensure safety of all the equipment and facilities of the TPO. In no circumstances, SCCL shall be liable to compensate for any damage, theft or loss of TPO’s facilities including equipment. SCCL shall maintain the security of its facilities and mining lease boundaries.

5.11. TPO to maintain records

TPO shall be responsible for maintaining all the registers like mine safety lamp room register, accidents records, air sampling report, etc. required by the Coal Mines Regulation – 1957, DGMS and all other statutes applicable for the working of underground coal mine.

TPO shall present weekly report on the compliance of the statutes to the SCCL for the mine working.

SCCL can inspect any record maintained at any time during the term of this contract and if TPO is found default, necessary action shall be taken by SCCL management.


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5.12. Good Housekeeping

TPO shall at all times keep the Mine and associated operational areas and environs in a neat, clean and safe condition. In the event of TPO’s failure to comply, SCCL may accomplish such clean-up as required at the cost of the TPO, if after 7 days written notice from SCCL, the TPO has failed to take appropriate action.

5.13. Administration of Agreement

TPO must administer the Agreement and the Work and in doing so must:

(a) Attend site meetings and any other meetings with SCCL, as reasonably necessary for the operation of the Mine and the administration of this Agreement or as otherwise required by SCCL;

(b) Keep accurate minutes of such meetings which must include list of actions agreed at those meetings;

(c) Provide the necessary information and assistance to SCCL to enable SCCL:

(1) To carry out its obligations and responsibilities under this Agreement; and

(2) To comply with the conditions of any Approvals and the requirements of any Applicable Law;

(d) Provide such written reports as required by SCCL. To ensure that SCCL is fully informed about the operation of the Mine and the Work, the reports are to be provided at regular intervals and in such a format as reasonably required by SCCL

5.14. Utilities

SCCL shall supply electricity at the surface sub station free of cost subject to the conditions agreed in this Agreement. SCCL shall also supply required water at surface at designated point. TPO shall make all the arrangements required for the supply and distribution of electricity and water in the mine. TPO shall also make arrangement for the supply of clean drinking water as required by statutes. The TPO must arrange for the supply of all other utilities required for TPO’s own work including communications, accommodation and messing, and pay for all charges for metering, connection and consumption of those utilities unless agreed by SCCL in this agreement.

For the purpose of this Agreement SCCL shall provide covered and unfurnished ware house, space for office and a maximum of twenty block (twin room) accommodation in “as is where is” condition. Electricity charges shall be borne by the TPO.


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5.15. Monthly Report

TPO shall submit to SCCL a monthly report describing the major activities for the preceding month. The report shall illustrate key performance indicators. The exact content of the report shall be agreed upon between SCCL’s Contract Representative and the Contract Representative TPO.

5.16. Daily Report

The TPO shall submit daily the detailed progress report to the Mines Manager in the proforma, prescribed by the Mines Manager.

TPO’s obligation to comply with Law

5.17. Compliance with all the applicable Laws

TPO shall ensure that none of the TPO’s employees, or any Sub-Contractors or the employees of any Sub-Contractor are allowed to work in contravention of the provisions of the Mines Act - 1952, CMR-1957, Mines Rules and other Applicable Laws, any other orders, instructions, amendments etc, connected with the above Act, Rules & Regulations as applicable in relation to the carrying out of the Works under this Agreement.

In the event of TPO’s failure to do so, SCCL shall be free without prejudice to its other rights, to remedy the breach and recover the cost thereof by making deduction from the TPO’s bill, security deposit or otherwise. The TPO shall hold the SCCL indemnified against all cost, damages, loss or any payment whatsoever, that the SCCL may incur as a result of such non-compliance.

5.18. Contract Labour (Regulation &Abolition) Act’ 1970.

The TPO is required to obtain Labour License under Section 12 of the Contract Labour (Regulation and Abolition) Act 1970 read with Rule-21 of the Contract Labour (Regulation and Abolition) Central Rule, 1971 and submit the same to Mines Manager of the Mines valid from date of work till the end of the work period. It will be the TPO’s responsibility to pay the wages/salaries to his employees on the payment date fixed as per their own standing order and in absence thereof the standing order of the concerned mines.

5.19. Workmen Compensation

TPO shall report occurrence of all accidents of their employees arising in the course of the work and shall effect payment of compensation at the rate at which SCCL pay compensation to its workmen whichever is higher, within the


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prescribed time limit. In case of any accidents the TPO must immediately bring it to the notice of the Manager in writing, who will send necessary notice to the concerned authorities within 24 hours of accident. In the event of TPO’s failure to pay compensation, the SCCL shall have the right to set apart the relevant amount from pending bills or other assets of the TPO with them for due settlement of the claim arising under the said Act and Rules at their own discretion and TPO shall bear the full responsibility in this behalf. In case TPO fails to report after occurrence of accident within 2 hours, then the non-reporting will be taken as violation of the agreement by TPO and SCCL reserves the right to take action as deemed fit under the statute and this will be treated as breach of agreement provision / terms.

5.20. Industrial Disputes Act

TPO shall comply with all provisions laid down in the Industrial Dispute Act, 1947 and matters relating to the settlement of various disputes arising in the work allotted to him and shall abide by the provisions of the said Act and Rules framed there under by the Central Government in matters of retrenchment, lay off and conditions of service of the employees engaged in his works. Besides, he shall adopt all measures in the direction of maintenance of perfect industrial peace in the work allotted to him.

5.21. Standing Order

TPO shall make his own standing orders for the employees/labourers engaged by him and get the same approved through the concerned Regional Commissioner or appropriate authorities and implement the same in conformity with provisions of Industrial Employment (Standing Orders) Act, 1946. In the absence of such Standing Orders, the Model Standing Order has to be implemented.

5.22. TPO shall abide by the decision/recommendations/award of the Labour Court/Industrial Tribunal or Commissions appointed by the appropriate Government in respect of the Industry and shall arrange/ implementation of the provision of the decision/award/recommendations from time to time and maintain such relevant records and registers as are required to be maintained under these legislation/award/decision and produce them before the Officer of the SCCL and other statutory authorities, as and when required.

5.23. Employee’s Provident Fund

TPO shall have their P.F. Code No. and shall be solely responsible for deductions of employees contribution and deposit of contributions regarding the provident fund under Coal Mines Provident Fund (CMPF) Act and any other


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applicable law made there under as amended from time to time. He shall be solely responsible for the maintenance of the records in respect of payment of contribution and submission of returns, in accordance with the provisions of the said Act and Schemes. A copy of such return along with original deposit challan duly certified by TPO that the amount has been deposited for the instant work, shall be submitted to Mines Manager appointed by SCCL and failure to submit sufficient proof on compliance of the above stated obligation, the TPO’s monthly bill shall not be released. If any liability arises on account of the failure of the TPO with regard to these provisions, SCCL will be entitled to recover the same from the bills or otherwise.

5.24. Minimum Wages & Provisions under Statute:

TPO shall adhere to the provisions of Minimum Wages Rules of Government of Andhra Pradesh at all the time during the tenure of the Project Agreement in regard to payment of minimum wages in respect of mine workers and shall pay in conformity with the provision of the same to all categories of workers employed or to be employed by him and shall also fix the norm of payment under different items in conformity with the above Act.

5.25. TPO shall be responsible to fulfill the provisions under the Mines Act, Coal Mines Regulations -1957 and Rules framed there under as amended but not limited to, from time to time in the matter of mining operations, health, cleanliness, working hours, annual leave with wages, drinking water, sanitation etc. and various other provisions in the said Act for the works connected with the operation of Mines. The TPO shall abide by all other applicable laws, rules and regulations.

5.26. Medical Facilities, Vocational training & Safety equipments:

SCCL shall provide medical facilities to the employees of TPO on chargeable basis. The medical facilities shall be provided at the Bhoopalpalli Area Hospital of SCCL as available. Vocational training to the TPO’s workers is compulsory and shall be provided by the TPO. All the cost of Vocational Training shall be borne by the TPO. No labour shall be employed by TPO without training at Vocational Training centre.

5.27. Bonus

TPO shall solely be responsible in respect of payment to his employees under the Payment of Bonus Act, 1965 as amended from time to time. TPO shall also be solely responsible for maintenance of records in respect of the above payment and submission of returns in accordance with the provisions of the said Act.


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5.28. Standing Order

In the matters connected with labour and staff under this Tender schedule/contract, TPO shall be “EMPLOYER” as defined in the various Acts, Rules, and Regulations pertaining to the nature of work involved.

5.29. Epidemic/ Contagious diseases

TPO shall report immediately to the SCCL, every case of epidemic or contagious disease occurring in colonies occupied by his employees. Failure to do so will render the TPO liable to the SCCL for any expenses or liabilities incurred by reason of such failure. TPO shall also take all the steps necessary to prevent such epidemic or contagious disease from spreading and to curb them. If TPO fails to do so, SCCL may take all necessary steps at TPO’s cost. Any such expenses shall be recovered from the bills payable to TPO, Bank Guarantee or Assets. The failure on the part of TPO shall be treated as breach of contract and default by TPO.

5.30. Medical Examination

TPO at his cost shall arrange for initial Medical examination & periodical medical examination of his employees as per Mines Rule, 1955. However, in case TPO fails to do the same, SCCL may do the same on behalf of TPO and the entire cost so borne shall be deducted from the bills payables of the TPO.

5.31. TPO shall be responsible to comply with all other applicable laws, Acts, rules, regulations, orders and amendments irrespective of whether they are provided expressly in this Agreement or not.

6. BANK GUARANTEE

6.1. The TPO shall provide to SCCL, a Performance Bank Guarantee, of INR 20 Crores on pursuant to the execution of this Agreement. This Bank Guarantee provided by the TPO would be valid till the Production Bank Guarantee is provided to SCCL. The Performance Bank Guarantee issued by Public Sector, Scheduled Commercial Banks (list is provided in the section A 21 of NIT) only shall be accepted. TPO must submit the performance bank guarantee within 20 days of effective date.


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6.2. From the Commencement of Coal Production Date the TPO shall provide to SCCL, a Production Bank Guarantee the value of which would be equivalent to the value of 3-months of coal production (the mining and transportation costs from mine working faces upto the delivery point at surface shall be considered for such value determination). The Bank Guarantee provided by the TPO would be valid on a yearly revolving basis, for every year of the Term of Agreement beginning from the Commencement of Coal Production date. The value of coal production shall be calculated based on the Mining fees (excluding royalty and taxes) quoted for the corresponding year by the TPO. The Performance Bank Guarantee issued by Public Sector, Scheduled Commercial Banks (List provided in NIT) only shall be accepted.

The Performance Bank Guarantee shall be released upon the issuance and verification thereof, of the Production Bank Guarantee.

7. QUANTITY OF COAL

Delivery of Coal

7.1. The TPO shall deliver 2.75 million tones (or the annual contracted quantity for the particular year as agreed in the agreement and mentioned in the attachment – 3) of Coal per operating year (the “Annual Contracted Quantity” or “ACQ”) to the delivery points at surface of the mine, provided that where an operating year is less than 12 (twelve) months ACQ shall be pro-rated accordingly.

7.2. Subject to Clause 7.1, SCCL may alter the quantity of Coal being supplied at surface delivery point depending on the requirements by giving a 30 day notice to the TPO.

7.3. At least 60 (sixty) days before any Operating Year, SCCL shall intimate the TPO of the quantity of Coal to be supplied in such operating year provided that SCCL may increase or decrease the ACQ for any operating year by 20% from the quantity agreed in this agreement for respective year.

7.4. At least 30 (thirty) days before the beginning of any quarter, SCCL shall intimate the TPO of the Quarterly Contracted Quantity (QCQ) to be supplied in the quarter.

7.5. If TPO fails to supply the agreed QCQ, he can make up for the deficit quantity in the subsequent quarters subject to the condition that TPO shall supply the agreed quantity of coal in any operating year.


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Measurement of Coal

7.6. The quantity of coal delivered at the designated delivery point (at surface) shall be measured in the pre weigh bins provided and maintained by TPO at the surface. Representatives of the parties shall be present to witness the weighment and sign the challan.

7.7. Quantity of coal supplied shall also be calculated on volumetric basis. Volumetric measurement shall be done by multiplying the volume of the coal excavated as measured in the survey which shall be conducted by SCCL at specified interval multiplied with the average density of coal which is 1.4 for the mine. TPO’s representative may witness the survey conducted by SCCL.

7.8. For the payment of the coal supplied, lower of the two weights shall be considered.

7.9. If, as a result of any inspection by the SCCL or any statutory inspection authority, any weigh bin is found defective and erroneous in excess of the tolerances provided by law (or if no such tolerance is provided by law, then in excess of the tolerance provided by BIS or if not provided by BIS, then as established in the manufacturer’s specification), an appropriate adjustment shall be made in the invoices and payments affected by such inaccuracy; provided, however, no such adjustment shall be made for a period in excess of the lesser of :

i) One-half of the period since the date that purchaser first questioned the accuracy of the weights and the date of the last test of the scales, or

ii) Three (3) months prior to the date of the request for verification.

TPO shall rectify the defect found within 15 days of the day on which such defect is identified.

Variation in Quantities

7.10. SCCL may also alter the Annual Contracted Quantity to be delivered in an Operating Year by giving at least 60 days notice to the TPO. Such a notice may be served provided that SCCL may not increase or decrease the Contracted Quantity by more than 20% (twenty percent) in an Operating Year.

7.11. Similarly TPO can also alter the ACQ to be delivered in an Operating Year by giving at least 60 days notice to SCCL. Such a notice may be served provided that TPO may not increase or decrease the ACQ by more than 20% (twenty percent) in an Operating Year.


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Quality of Coal

7.12. All coal delivered hereunder shall be free of stones and metal objects. The TPO shall adopt prudent industrial practices to avoid a mixture of foreign materials like stones and metallic objects during mining of Coal and ensure that no stones or foreign material extraneous to Coal shall be delivered.

8. TAKE-OR-PAY AND SERVE-OR-PAY

8.1. SCCL may alter the Contracted Quantity to be delivered in an Operating Year by giving at least 60 days notice to the TPO. Such a notice may be served provided that SCCL may not increase or decrease the ACQ by more than 20% (twenty percent) in an Operating Year. Any deviation resulting in lower off-take of coal by SCCL than the permitted 20% deviation shall attract Take-Or-Pay as described in Clause 8.2. except if the deviation is due to a Force Majeure Event or results to an Event of Default of the TPO.

8.2. When the offtake by SCCL is lowered by more than 20% from the production plan specified for the half-year, SCCL shall pay to TPO for the differential quantity of coal (% reduction in coal offtake less 20%) an amount equal to the fixed component of the mining fee for the year in which SCCL reduces its off-takes by more than 20% the volume specified in production plan for the year.

8.3. The TPO may also alter ACQ to be delivered in an Operating Year by giving at least 60 days notice to SCCL. Such a notice may be served provided that the TPO may not increase or decrease the ACQ by more than 20% (twenty percent) in an Operating Year. Any deviation resulting in lower delivery of coal by the TPO than the permitted 20% deviation shall attract Serve-Or-Pay as described in Clause 8.4.

8.4. Obligation under Serve or Pay Basis

In the event of the TPO’s inability to meet the production requirements on annual basis, TPO shall be liable to financial penalty.

In the event of deficit in the Coal delivery without prior notice and approval thereof, the serve-or-pay shall be attracted to the entire deficit quantity.

The financial penalty shall be governed by the schedule provided below.


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Shortfall in the Quantity Supplied

Penalty when notice of shortfall is given by TPO

Penalty when notice of shortfall is not given by TPO

Shortfall < 20% of ACQ NIL 0.25 times the notified basic price for the same grade of coal by SCCL.

20% of ACQ<Shortfall < 35% ACQ

0.25 times the notified basic price for the same grade of coal by SCCL.


35% of ACQ<Shortfall< 50% ACQ



50% of ACQ < Shortfall 0.75 times the notified basic price for the same grade of coal by SCCL.


Where, ACQ is annual contracted quantity. Any penalty applicable shall be adjusted against subsequent invoices.

9. CHANGES TO RATES OF REMUNERATION

9.1. Adjustment to Rates

For the Coal delivered at specified delivery point, no adjustments to the Schedule of Rates shall be applicable during the course of this Agreement. The coal supplied shall be analyzed for the moisture content and accordingly quantity of coal supplied shall be adjusted. If the Total Moisture (ARB) in the coal as determined in a consignment on sampling and analysis exceeds 12%, the weight of Coal received shall be reduced by the same percentage by which the moisture content exceeds 12 %. No bonus or weight adjustment shall be effected for total moisture content (ARB) in Coal below 12 %.

9.2. Escalation rates for Operating Expenses

9.2.1. The fees quoted shall be applicable for the first operating year which can be escalated in accordance with the clause 9.2.2. If the mine and the agreement are extended beyond last operating year under the term of this agreement, the fees quoted for the last operating year shall be paid, if such extension does not exceed 6 moths beyond the last operating year. If agreement extends by more than 6 months, fee payable shall be escalated.


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9.2.2. For the period from 2nd year to the 13th year of the Project agreement, the following shall be applicable:

(a) The 60% of the Mining fee quoted shall be considered as variable component and shall be escalated annually based on Formula for Escalation Rate provided in the appendix (Section A20) in the NIT.

(b) The escalation rate applicable for payment for an operating year shall be calculated 15 (fifteen) days prior to the start of the operating year and shall be notified by SCCL.

10. [NAME OF TPO]/TPO WARRANTIES

10.1. Express Warranties

The TPO warrants to SCCL that:

(a) It shall complete the Work in accordance with the terms of this Agreement using best industry practice and providing all appropriately qualified supervision;

(b) It has the required skill and expertise to carry out the work and that the TPO’s Employees, agents, consultants and Sub-Contractors shall have all the relevant experience necessary to perform the work;

(c) It shall perform the Work in accordance with:

(1) All relevant Approvals in so far as they relate to the TPO’s Scope of Work in Attachment 1;

(2) The approved Mine Plan, as agreed to by SCCL;

(d) It shall perform the Work in accordance with all the Applicable Laws including Environmental Law, in so far as they relate to the TPO’s Scope of Work in Attachment 1.

10.2. Warranty as to Information

The TPO warrants that it has and is taken to have:

(a) Examined and has acquired actual knowledge of the contents of all documents and other material made available to it by SCCL, in relation to the Work and the Mining Concessions.

(b) Satisfied itself regarding such factors as environmental, topographical, climatic, geological, social and political conditions which could affect its ability to carry out the work in accordance with the terms of this Agreement and which it could have obtained by making all reasonable enquiries;


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(c) Informed itself as to the availability and cost of labour, including the cost of complying with obligations imposed by any relevant agreement between the relevant industry unions and employers;

10.3. Implied Conditions or Warranties

The warranties set out in this Clause are in addition to and do not limit or exclude any conditions or warranties contained in any other provision of this Agreement or implied in this Agreement by any Law.

11. MANAGEMENT AND INDUSTRIAL RELATIONS

11.1. The TPO Responsible for Mining Operations

Except as expressly provided in this agreement, the TPO is responsible for all industrial and workplace relations matters relating to any of the TPO’s employees, agents or consultants or any employees, agents or consultants or any Sub-Contractors.

11.2. The TPO to Establish Management Plan

Within 15 (fifteen) days from the Commencement of Coal Production Date, the TPO must submit to SCCL its proposed annual Mine Management Plan, which shall be subject to SCCL’s approval. SCCL reserves the right to modify the frequency of preparation and submission of Mine Management Plan by the TPO.

11.3. The TPO to inform SCCL of Industrial Instruments

Without limiting Clause 11.2, within 90 (ninety) days from the Commencement of Coal Production Date of this Agreement the TPO must inform SCCL of the proposed industrial instrument or instruments which shall apply to the employment of the TPO’s Employees and those of its Sub-contractors who undertake the Work. At the request of SCCL, the TPO must meet SCCL to discuss such industrial instruments, and in finalizing and implementing the industrial instruments the TPO must take into account the reasonable requests of SCCL.

11.4. TPO to keep SCCL fully informed

The TPO must promptly notify SCCL of any management matter, including matters relating to industrial relations and industrial issues, which may affect SCCL or the TPO or the performance of the Work and any measures which the TPO proposes to take in relation to these matters.


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11.5. The TPO must not commit SCCL on Industrial Relations

The TPO must not make any commitment or agreement relating to industrial relations of workplace matters which in any way interferes with or affect SCCL’s position with respect to its own employees, agents Sub-contractors or consultants, including commitments or agreements which impact upon SCCL’s industrial obligations.

11.6. No Employee Relationship

The Parties agree that nothing in this Agreement creates or is intended to create the relationship of employee and employer between SCCL and any employee, agent, consultant, Sub-contractor or any other person employed or engaged by the TPO to carry out the Work. Without limiting the extent of this Clause, on termination of this Agreement and if for any reason, SCCL is not required or obliged to employ any employee, agent, consultant, Sub-contractor or any other person who is at that time, or was at any time previously employed or engaged by the TPO to carry out the Work.

11.7. SCCL may give directions in relation to Industrial Issues

If the TPO has been involved in an industrial dispute or dispute which materially affects the Work for 7 (seven) days or more continuously, SCCL may give the TPO reasonable directions as to the resolution of the issue or dispute or any step which might be taken by the TPO in relation to the issue or dispute.

11.8. TPO an Independent Contractor

It is expressly understood that the TPO is an independent contractor and that the TPO’s Employees are not servants, agents, or employees of SCCL. The actual performance of the Work shall be carried out by the TPO under the supervision and direction of SCCL without however reducing TPO’s obligations under this Agreement. SCCL shall at all times have access to the operations and Work performed hereunder by the TPO

12. STATUTORY REQUIREMENTS

12.1. Compliance by the TPO

Without limiting Clause 10 in carrying out the Work, the TPO must:

(a) Keep all the records to comply with the Approvals; _______________________________________________________________Project Agreement for KTK Longwall Project

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(b) Allow SCCL to inspect and take copies of those records at any time on reasonable notice to the TPO;

(c) Allow SCCL to audit TPO’s compliance with the approvals and provide SCCL with all information and assistance reasonably required by SCCL in connection with any audit.

12.2. Notification of Breach of Approvals

The TPO must notify SCCL as soon as it becomes aware of:

(a) Any complaint or enquiry made by any person in connection with the Approvals or any Environmental Law; and

(b) Any matter or any conduct which does or may, in TPO’s reasonable opinion, constitute a breach of any of the Approvals.

12.3. Compliance with Directions of the Certified Mine’s Manager

The TPO must, and must ensure all of its employees, agents, consultants and Sub-contractors, comply with all reasonable directions of the Certified Mine’s Manager. It is understood that such compliance may give rise to a variation from the contract

12.4. Statutory Responsibilities

The TPO further acknowledges that pursuant to the terms of the Mining Concessions, the Coal Mines Regulation 1957 and the Coal Mines Nationalization Act, and any other Applicable Law, SCCL and the Certified Mine Manager have certain statutory responsibilities for the conduct of operations on such contract areas.

12.5. Instructions of Certified Mine’s Manager

The TPO acknowledges and agrees that any instructions given by the Certified Mine Manager or SCCL’s Contract Representative as a result of a breach of the Applicable Law by the TPO or any of the TPO’s employees or Sub-Contractors shall be observed and acted upon without delay and further that such Certified Mine Manager or SCCL’s Contract Representative shall be entitled to require the TPO to remove any of its employees or Sub-Contractors from the Mine and the work and upon receipt of any such instruction, the TPO shall remove the person specified immediately without delay.


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13. INDEMNIFICATION AND LIENS

13.1. Observe All Relevant Laws

Each Party hereby agrees to indemnify and hold the other Party, its employees, agents, consultants, Sub-contractors or affiliates harmless from and against any costs, prosecutions, penalties or other liability arising due to the failure of the indemnifying Party to comply with the Applicable Law..

13.2. Remote Damages

Save as otherwise expressly provided for in this Agreement, neither Party, nor any of their respective elected or appointed officials, directors, officers, shareholders, managers, or employees shall be liable to the other Party, or its directors, officers, shareholders, managers or employees, whether under breach of contract, breach of warranty, guarantee, indemnity, tort liability (including without limitation negligence), or otherwise, for any incidental, special, indirect, exemplary, punitive or remote damages whatsoever (including without limitation damages for loss of reputation or business opportunity or revenue) of any nature connected with or resulting from performance of this Agreement, but shall only be liable to the other Party for direct and actual damages.

13.3. Notwithstanding anything stated in this Agreement TPO shall indemnify SCCL for any Claims, demands, causes of action or other litigation of any kind arising out of the performance of Work by TPO in terms of this Agreement.

14. OCCUPATIONAL SAFETY AND HEALTH

14.1. The TPO responsible for Safety

The TPO must at all times at its cost ensure that it takes all necessary precautions for the safety of all its personnel on the Mine including the TPO’s employees, agents, consultants and Sub-contractors and their employees, agents and consultants. It is TPO’s responsibility to provide all its employees, the minimum required personnel protective equipments required for underground mine which shall include mine safety lamp, safety shoe, safety helmet, gloves, goggles etc.


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14.2. Compliance with Laws and Policies

Without limiting Clause 14.1 the TPO must comply with:

(a) the Mine Safety Management Plan including reasonable amendments thereto;

(b) all Applicable Laws including Laws relating to occupational health and safety;

14.3. TPO’s responsibility to provide PPE:

Approved Personal Protective equipments/Safety equipment like Safety helmets, Safety boots, goggles, safety belts, leg guard etc. shall be provided by TPO at his own cost to all his entitled employees. TPO shall ensure use of such equipments by the all his employees at the work site as per statute. If TPO fails to provide such equipments, the Mines Manager of the mine shall procure these safety equipments and supply to the workers of TPO. The entire cost of such procurement plus 17.5% for supervision and storage charge shall be recovered from the TPO’s bills.

14.4. TPO’s failure to Comply

If the TPO fails to comply with any obligation under Clause 14.2, SCCL may give notice to the TPO. If the notice is for an emergency safety situation and the TPO fails to respond immediately, SCCL may then immediately perform any obligation of the TPO on behalf of the TPO and at the cost of the TPO.

14.5. Submission of Accident and Incident Reports

The TPO shall submit to SCCL within twenty four hours, detailed reports of any accidents and/or incidents. Accidents and incidents include all matters involving damage to any structure, equipment or vehicle, bodily injury or death, health problem, any matter involving the general public, any matter involving the TPO’s agents, consultants and Sub-contractors, any matter involving any authority or governmental organization, any matter involving the environment and any other matter that may reasonably be deemed serious.

The TPO shall submit follow up reports after the initial report and do everything necessary to keep SCCL informed of the situation.

The TPO shall submit a final report on the accident/incident after the cessation of the event or on settlement of the matter.


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14.6. Costs associated with mine safety and non-compliance to Environmental Laws

The TPO shall bear the costs of any safety measures implemented on the mine site and other areas of Mine related activity. In the event of a Mine accident on account of non-compliance to safety measures or otherwise, the TPO shall bear the full costs associated with safety fines, medical treatment, or compensation.

15. CARE OF WORK

15.1. TPO Responsible for Care of Work

From the Commencement Date to Completion (or any earlier termination of this Agreement) the TPO is responsible for care of all materials, plant and equipment required by the TPO for performing the Work.

16. INSURANCE

16.1. TPO Insurance

The TPO shall carry and keep current during the Term of this Agreement adequate insurance coverage for the TPO’s employees, the coal mining, handling & transportation facilities, the contracted facilities and equipment, Third Party Liability policies and Motor vehicle insurance covering own damage, Third Party Property damage and Third Party Personal Injury insurance to the satisfaction of SCCL. The TPO shall upon request of SCCL, furnish SCCL with particulars of the insurance policies procured by the TPO for the purpose of the Works.

The TPO shall indemnify SCCL against any financial losses, any coal losses, penal sanctions, claims or any other losses that may result due to lack of required insurance cover.

17. ACCESS TO MINE

17.1. TPO’s Access

SCCL shall give the TPO sufficient access to the Mine to enable the TPO to execute the Work. The TPO acknowledges any right it may have under this Agreement to occupy any part of the Mine is a mere license to occupy and does not give TPO any right to that property or Law or otherwise except as expressly provided in this Agreement.


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17.2. Access for SCCL and Others

The TPO acknowledges that SCCL its employees, agents, consultants and sub-contractors may need to carry out works and activities at the Mine. The TPO agrees that it shall provide access to SCCL, its employees, agents, consultants and sub-contractors for any purpose required by SCCL. The TPO must co-ordinate it’s Work with any work being carried out by SCCL to minimize disturbance or interference resulting from both the TPO and SCCL being at the Mine. It is understood that any significant change to the TPO’s method of working or to the agreed Mine Plan shall require a written directive from the Certified Mine’s Manager and may be considered a variation in accordance with Clause 21.2

18. MINE PLANNING AND SCHEDULING.

18.1. Preparation

Within 15 (fifteen) days from the Commencement Date of this Agreement, or any other date as agreed between the Parties, the TPO shall provide to SCCL a 3 monthly Mine Plan/Schedule covering the first 3 months of the Term of the Agreement. Within 30 (thirty) days from the Commencement Date of this Agreement, or any other date as agreed between the parties, the TPO shall provide to SCCL a 12 month Mine Plan/Schedule covering the first 12 months of the Term of the Agreement. The Mine Plan/Schedule shall be consistent with the Production Requirements of this Agreement, and in a format consistent for use in good mine planning practices. SCCL shall be allowed a period of 7 (seven) days from the issuance of the 3 monthly Mine Plan/Schedule and 14 (fourteen) days from the issuance of the 12 month Mine Plan/Schedule, for the purposes of review and to state any objections. If no such objections are submitted in writing to the TPO, then the Mine Plan’(s)/Schedule’(s) shall be considered to be accepted by SCCL. In the event that objections to the Mine Plan’(s)/Schedule’(s) are submitted, then SCCL and the TPO shall conclude a mutually satisfactory resolution to the objection(s)

18.2. Revisions to the Mine Plan/Schedule

18.2.1. The TPO shall not make any revisions or changes to the Mine Plan/Schedule without the express written approval by SCCL.

18.2.2. The TPO may, at any time, provide to SCCL, proposed revisions to the Mine Plan/Schedule in a format consistent for use in good mine planning practices. SCCL shall be allowed 7 days from the issuance of the proposed


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revision, to review and to state any objections. If no such objections are submitted in writing to the TPO, then the revised Mine Plan/Schedule shall be considered to be accepted by SCCL.

18.2.3. SCCL shall provide the TPO with the latest transportation schedule on a monthly basis. Any changes to this schedule shall be notified immediately by SCCL to the TPO.

18.3. Monthly Mine Plan

The TPO shall provide SCCL with a rolling 3 monthly Mine Plan/Schedule which shall be up-dated and submitted to SCCL at least 3 weeks prior to the completion of the Mine Plan/Schedule that is in current use. The 3 monthly Mine Plan/Schedule shall contain such information as necessary for good mine planning and scheduling practice as reasonably requested by SCCL and otherwise agreed to by SCCL.

18.4. Other Plans required

TPO shall provide SCCL with plan for the development and extraction of coal from a panel, atleast 15 days prior to the starting of the work in that panel. TPO shall furnish all the details, support plan and other requirements in such plan as required by applicable statutes and directions given by DGMS.

19. PRODUCTION REQUIREMENTS AND COAL RECOVERY

19.1. TPO to meet Production Requirements

The TPO must progress the Work in accordance with this Agreement including the Mine Plan/Schedule, the Production Requirements and all schedules of production contained in the Mine Plan.

19.2. Failure to meet Production Requirements

If the TPO is unable to or anticipates that it may be unable to meet the Production requirements it must immediately notify SCCL and provide details of:

(a) The reason for its inability to meet the Production Requirements; and

(b) The steps it has taken or proposes to take to minimize any production losses to SCCL.

The decision of SCCL on the delays shall be final and binding.


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19.3. Obligation under Serve or Pay Basis

In the event of the TPO’s inability to meet the production requirements as decided upon in the Mine Schedule/ Mine Plan, the TPO shall be liable to the penalty in accordance with the clause 8.4.

20. SUSPENSION OF WORK

20.1. Suspension of Coal Production by SCCL

20.1.1. If SCCL considers suspension of the whole or any part of the Coal production or Works under this Agreement is necessary:

(a) Because of any act, default or omission of SCCL or its employees, agents, consultants or sub-contractors other than the TPO.

(b) Because of any act, default or omission of the TPO or TPO’s Employees, agents consultants, Sub-contractor; or

(c) For the protection of safety of any person or property; then

20.1.2. SCCL may direct the TPO in writing to suspend the progress of the whole or any part of the Work for such time as SCCL reasonably determines. The anticipated period of suspension shall be given in writing by SCCL within 24 hours of enacting the suspension.

20.1.3. If the cause for suspension of the Works is on account of conditions stated in Clause 20.1.1(a), the TPO shall be compensated under the conditions stated in the Take or Pay terms;

20.1.4. If the cause for suspension of the Works is on account of conditions stated in Clause 20.1.1 (c), the TPO shall be compensated under the conditions stated in the Take or Pay terms provided that the TPO is not responsible for the reasons for suspension of works under Clause 20.1.1 (c).

20.1.5. If the suspension of works is because of any act, default or omission of the TPO or TPO’s Employees, agent, consultants, Sub-contractor as stated in Clause 20.1.1 (b), the TPO would be bound by the Serve or Pay terms of this Agreement.

20.2. Request for Suspension by the TPO

If the TPO wishes to suspend the progress of the whole or part of the Work it must notify SCCL and explain the reasons for the requested suspension. SCCL may, in its absolute discretion, grant permission for the suspension of the whole or part of the Work for such time as SCCL believes applicable, and SCCL shall be compensated for losses of any kind due to such suspension as per the Serve or Provide conditions.


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20.3. Recommencement of Work after Suspension

If SCCL or TPO becomes aware that the reason for the suspension of Work no longer exists, it must notify the other Party in writing and the Work shall recommence as soon as reasonably practical after such notice has been given

21. VARIATIONS

21.1. Variations to be approved by SCCL

The TPO must not vary the Work except as directed in writing by SCCL.

22. PROVISION OF MATERIALS, LABOUR AND EQUIPMENT

22.1. Provision of Material and Labour

Except as otherwise provided in this Agreement the TPO must supply all materials and labour necessary to complete the Work in accordance with this Agreement and the TPO acknowledges the cost of that supply has been allowed for in the Schedule of Rates.

22.2. Provision of Plant and Equipment

The TPO must supply all machineries, equipment, support system and plants necessary to complete the Work in accordance with this Agreement. The TPO acknowledges the cost of providing the plant and equipment shall be deemed to be paid through Mining fee.

23. TPO’S EMPLOYEES

23.1. TPO’s Warranty to Provide Suitably Experienced and Qualified Personnel

The TPO represents and warrants that each and every one of TPO’s Employees are fully capable, suitably experienced, qualified and medically fit for their respective assignment, and shall perform the services required of them by SCCL. SCCL shall have the right to approve all key site based management personnel employed by the TPO, and any such employee, once so approved, shall not be removed or replaced without SCCL’s prior approval. SCCL reserves the right which is exercisable at any time and from time to time, to direct TPO to replace any of the TPO employees who in


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SCCL’s sole opinion is/are unsatisfactory in their performance of the Work. All replacement employees shall be approved by SCCL. The approval requirements or this provision apply equally to personnel employed by the TPO as agents, consultants and Sub-contractors. TPO also warrant that he shall provide his employees with regular training program to keep them updated with latest developments in the technology and also make them aware of the working condition of the mine.

23.2. Organisation Chart

Within 15 (fifteen) days of the Commencement Date, the TPO shall submit to SCCL an organisation chart showing relative relationship and areas of responsibilities of all personnel it intends to use for executing the Work. The Organisation Chart should include the title of all supervisory personnel on site and also reporting relationship between site operations and regional and Head offices as applicable including title, and responsibility of non-field management personnel involved with the services, in particular the immediate supervisor(s) of the Project Manager which will be appointed by TPO.

23.3. Medical Services

The TPO shall adhere to the provision of medical facilities as per the Medical Policy of SCCL or as specified by the Mines Act, 1952, and any other Applicable Laws, and rules and regulations notified therefrom, whichever is stricter. Medical assistance to the employees of the TPO can be provided by SCCL to the extent of facilities available at SCCL Bhoopalpalli Area Hospital on chargeable basis.

23.4. Provision of Replacement of TPO’s Employees

Replacement employees who meet all of the requirements of this Agreement shall be promptly provided by the TPO at its own cost.

23.5. Availability

It is the TPO’s responsibility to ensure that the TPO employees are available as required to provide performance of the Work. The TPO shall provide for rotations vacations, leaves, illness or any other absences (including removal pursuant to the directions of SCCL as set forth in Clause 23.1).


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23.6. Site Camp and Accommodation facility

The TPO shall not construct any site camp or accommodation facilities within the boundaries of the Mining Concessions without the express written approval by SCCL. SCCL shall provide covered and unfurnished ware house, space for office and a maximum of twenty block (twin room) accommodation in “as is where is” condition to the TPO. Electricity charges of such accommodation shall be borne by the TPO.

23.7. Visitors

The TPO shall not invite any other personnel (any person not directly employed by the TPO, its agents, consultants or Sub-contractors) to visit the Mine or any associated facility without first obtaining the prior written consent of the SCCL Representative. At least three days prior to the intended visit, the TPO shall provide the Contract Representative of SCCL with details of the intended visitors, the purpose of their visit and reasonably demonstrate their need to visit the site. SCCL reserves the right to reject any such individual it considers unsuitable. Notwithstanding the prior approval of the Contract representative of SCCL, the TPO shall bear full responsibility for the safety of the visitor or visitor’s and indemnifies SCCL accordingly. The TPO shall also ensure and bear responsibility for the confidentiality of the mining activity in this respect. No person shall be permitted to enter into the mine unless authorized by the manager of mine who shall be SCCL’s representative also.

23.8. Enlistment

Neither the TPO nor SCCL shall enlist personnel employed by or working under the supervision or control of the other or of the other sub-contractors on the Mine site. Neither the TPO nor SCCL may employ or engage either by means of direct hire or via others, an individual who has previously been in the employment of or under the supervision and control of the other, or of other Sub-contractors on the Mine site until a period of one month has elapsed from their termination from the others employment unless by mutual agreement. Even after the lapse of one month after termination of an employee by SCCL, the TPO shall not employ the person unless express consent is given by SCCL.

24. TPO’S EQUIPMENT AND FACILITIES


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24.1. Provision of Equipment by the TPO

The TPO agrees that the TPO shall provide Equipment for use in performing the Work as required by the provisions of this Agreement and in accordance with the Applicable Law. The TPO warrants it has good title to its owned Equipment for valid contractual right to use the same, and that there are no liens or encumbrances thereon which would restrict the TPO’s Equipment being used hereunder.

.

24.2. TPO’s Equipment Availability

(a) TPO agrees to ensure that the TPO’s Equipment is available for such use by the TPO in good safe and efficient working condition and to maintain the TPO’s Equipment and to carry out all repairs thereto so that it shall remain in good, safe and efficient working order throughout the term of this Agreement. TPO shall deploy and use only DGMS approved type equipment and accessories including lubricants. SCCL may conduct Safety audit at any point of time, of the equipment to ensure safe operations

(b) The TPO shall submit a weekly report to SCCL reporting details of the previous weeks overall equipment availability and the projected equipment availability against total equipment numbers for the following week.

24.3. Provision of Explosive, Tools, Equipment, Fuel, Lubricants, Spare Parts, Supplies and Incidentals

The TPO shall at its own cost provide all tools, equipment, fuel, lubricants, spare parts, materials, supplies and incidentals in sufficient quantities, transportation, including but not limited to vehicles, as required for the operation, maintenance and repair of the TPO’s Equipment in connection with the performance of the Work.

SCCL shall supply required quantity of explosives permitted for the use in the mines at standard charges which shall include handling charge at a rate of 20% of the cost of explosives.

Cost of explosives those received and not consumed by TPO and any quality wise disputes in regard to the explosives supplied to TPO shall be borne by TPO and SCCL shall not be responsible for any such matter. SCCL is responsible only for placing orders & issuing explosives to TPO at Magazine only

24.4. Transportation

The TPO shall be responsible, at its risk and cost, for all transportation of the TPO’s Equipment by any means, both to and from the Mine.


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24.5. Loss or Damage to TPO’s Equipment

SCCL shall not be liable for any loss of, or damage to, the TPO’s Equipment, either whilst at the Mine, or in transit thereto, or there from.

24.6. Security of the TPO’s Equipment

The TPO shall be responsible for the security of its equipment, installations, materials, tools and supplies in the Mine.

24.7. Support Facilities – Permanent and Temporary – Mobilisation and Demobilisation

The TPO agrees to furnish, mobilise and install all temporary facilities, which are required to support the Work, personnel and equipment in the Mine. Prior to the construction of any facilities, the TPO shall submit a written request for SCCL approval which shall be accompanied with drawings, specifications and other relevant data as may be reasonably required for timely approval, which shall not be unreasonably withheld, to allow effective installation to be completed as scheduled. All facilities provided by the TPO shall be deemed to be exclusively for the Work to be provided under this Agreement and shall not be removed without SCCL’s written approval. At all times during the Term of this Agreement the TPO shall operate and maintain such facilities in safe and clean operating condition. Upon Completion, the TPO shall remove and demobilize (at its own cost and risk) all of its temporary facilities. The TPO shall at its own cost, rehabilitate to SCCL’s satisfaction any area’s occupied by the TPO facilities upon Completion.

24.8. Provision, Removal and/or Replacement of TPO’s Equipment

The TPO shall not remove or replace any of its Equipment from the Mine and associated working locations without first notifying Contract Representative of SCCL and obtaining permission from SCCL’s Contract Representative to execute the removal or replacement. SCCL’s Contract Representative shall not unreasonably deny permission for the removal or replacement of any of TPO’s Equipment.

25. MEASUREMENT AND PAYMENT

25.1. Currencies

All amounts stated in this Agreement are stated in INDIAN RUPEES (INR) unless otherwise stated.


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25.2. Coal Delivery and Invoicing

In consideration of the TPO performing the Works under this Contract, SCCL shall pay the TPO the Contract Price, which shall be computed and paid in the manner stated hereunder. A summary of the Contract Price to be paid to the TPO by SCCL is contained in Attachment 4 hereto, which is subject to adjustments to be agreed by the Parties hereto.

(a) SCCL and the TPO shall conduct a joint survey to determine the progress of the Works at the end of each calendar month, all as detailed in Clauses 25.2, 25.3 and 25.4. This measurement shall be completed by the 5th day of the following month and summarized by the TPO on a Progress Certificate to be delivered to SCCL.

(b) Within 2 weeks of receipt from the TPO, SCCL shall check the Progress Certificate then subject to clause 25.6, approve and return the Progress Certificate to the TPO.

(c) For the purpose of billing and payment, each day’s coal delivered at the surface at designated delivery point shall be treated as “one consignment” and processed for payment. The quantity of coal delivered for the purpose shall be measured in accordance with clause 7.5 of this agreement. The TPO shall submit the Bills in triplicate in complete manner on fortnightly basis.

(d) The coal mining fee shall be payable fortnightly. The TPO shall submit its bills, complete in all respects, within (7) days from the end of the fortnight. SCCL shall make payment after 7 days but within 10 days of the submission of the bill.

(e) From the running bills of the TPO further security deposit (FSD) of 1% of the bill value shall be deducted. The FSD so recovered shall be refunded annually (on submission of documentary evidence) after ensuring that the TPO has fulfilled the statutory obligations like payment of minimum wages, EPF, ESI etc. Further, The FSD is liable for forfeiture in case of failure of the TPO to execute the order as per order terms along with other guarantee amounts.

(f) Payments made by SCCL based on such invoices, shall constitute an acceptance of the Works covered by such invoices. Any unpaid amounts from agreed invoices existing seven (7) days after the periods prescribed above shall be subject to interest at the rate being Prime Lending Rate less 300 basis point of the State Bank of India prevailing on the date payment became due, calculated from the date on which payment became due. The foregoing is without prejudice to any other right of the TPO under the provisions of this Contract and the applicable law for the recovery of overdue amounts


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(g) If either Party fails or neglects to attend any joint survey or measurement, the other Party shall be entitled to proceed with the survey or measurement on it’s own, and the results so obtained shall be deemed to have been obtained pursuant to a joint survey or measurement.

(h) After the completions of the joint survey, TPO shall issue a progress certificate and shall submit it to SCCL within 5 days of completion of survey.

25.3. Disputed Measurement

(a) If SCCL disputes any aspect of a Progress Certificate, it shall within 10 working days after receipt of the Progress Certificate notify the TPO in writing of all aspects that it disputes, and to the extent to which it is able to calculate them, provide details of the adjustments that it requires. SCCL may request the TPO to provide such further information as it requires to determine the amounts in dispute and if so requested the TPO shall provide such further information as soon as practicable and in any event not later than 5 days after being so requested. If upon receipt of such further information SCCL no longer disputes any aspect of the Progress Certificate, SCCL shall approve the Progress Certificate without delay.

(b) If the TPO notifies SCCL in writing that it agrees with the adjustments requested by SCCL, then the TPO shall revise the Progress Certificate accordingly and SCCL shall approve such revised Progress Certificate without delay.

(c) If the TPO notifies SCCL in writing that it disagrees with the adjustments requested by SCCL, then the TPO may revise the Progress Certificate to show the amount with which SCCL agrees and SCCL shall approve such revised Progress Certificate without delay. The Mine site personnel of the Parties shall endeavor to agree the disputed amount before the next month’s survey or measurement. In the event that this is not possible, the dispute shall be resolved in accordance with clause 33.

25.4. Tax

For the taxes and levies, following shall be applicable:

i. The mining fee quoted by the TPO shall be exclusive of Stowing Excise Duty, royalty payable to State / Central Governments and Service Tax.

ii. Stowing excise duty, royalty payable to the State / Central Government shall be payable directly by SCCL to the respective Government Authorities.

iii. The mining fee quoted shall be exclusive of the applicable service tax which shall be paid at the prevailing rates.


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iv. All other taxes payable by the TPO, which are incidental to the Scope of work of this Project Agreement as on date of submission of the bid shall be deemed to have been included in the quoted rate itself and no additional payment would be payable.

v. If there is any revision in the applicable rates of taxes, which are in force as on the date of submission of the Bid, such variation shall be to SCCL account. Similarly, if any new taxes are introduced or any taxes are omitted/withdrawn after submission of bid and till the end of the contract period, such addition /deletion shall be to SCCL’s account. For the applicability of this clause, bidders shall provide the detailed breakup of the mining fee indicating the portion of mining fee attributed to the coal mining and various taxes considered for estimating the mining fee. The provisions of this clause shall be applicable only to those taxes which are considered by the bidder for estimation of mining fee except income tax as applicable to bidder and/or its employees.

26. CONTRACT REVIEW

26.1. SCCL may request review

At the request of SCCL, the TPO shall meet to review the performance of the Agreement by the TPO to determine what action, if any, is necessary to improve such performance.

26.2. TPO to Provide Information

The TPO must provide SCCL with any information and documents (except information which the TPO can demonstrate to the reasonable satisfaction of SCCL is commercially sensitive or confidential) requested by SCCL which, in the reasonable opinion of SCCL, is necessary to review the performance of the TPO under this Agreement.

27. REPRESENTATIVES

27.1. SCCL Representative

The Contract Representative SCCL and/or Certified Mines Manager shall be responsible for the overall administration of this Agreement. The TPO must comply with directions given by Contract Representative SCCL to the TPO on matters relating to compliance with the terms of this Agreement and to the obligations imposed on the TPO under this Agreement. It is understood that any direction which varies the terms of this Agreement or the obligations imposed on the TPO may be considered a variation in accordance with Clause 20.2. All directions must be given in writing or given verbally and confirmed


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in writing.

27.2. TPO Representative

(a) Prior to the commencement of any Work, the TPO must appoint, by notice in writing to the Contract Representative SCCL, a competent and experienced Contract Representative TPO.

(b) The Contract Representative TPO is responsible for all daily communication between TPO and SCCL.

(c) The Contract Representative TPO is authorized to negotiate and to bind the TPO in all matters including and in relation to this Agreement and the Work.

(d) The TPO must ensure that, as far as reasonably practicable, the Contract Representative TPO is contactable at all times during the performance of the Work. .

28. EVENT OF DEFAULT

28.1. An event of default is said to have occurred under the following conditions:

(a) Delay in commencement date by more than one months from the effective date due to delay in obtaining the necessary approval and clearances for which TPO is responsible.

(b) Delay in Commencement of Coal Production Date by more than three month from the time period mentioned in Clause 3.3 due to TPO’s delay in deploying the necessary mining equipment, staff and labour and other operational requirements for coal production.

(c) The production of Coal by the TPO falls short of the Mine Plan/Schedule by more than 20% for 2 (two) consecutive Operating Years of production.

(d) In case of a production shortage, the TPO is deemed to default if the TPO fall short of planned production by more than 50% for 2 (two) consecutive quarters in an Operating Year. This Clause would be applicable in all the cases whether TPO serve the notice of shortfall or not.

(e) In case SCCL fails to pay for the excess/ deficit production of Coal in excess of 20% under the Take or Pay basis for (2) two consecutive quarters in any Operating Year, a default event is said to have occurred.

(f) In case SCCL fails to pay for the entire quantity of Coal delivered at the delivery point for 1 (one) quarter, an event of default is deemed to have occurred.

(g) The other party has materially defaulted and failed to comply with the terms _______________________________________________________________Project Agreement for KTK Longwall Project

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and conditions set in the contract.

Termination condition in case of Force Majeure

28.2. If, the production of Coal is delayed for more than a year or permanently stopped due to a Force Majeure event for a continuous period of 3 months.

Liquidated damages due to delays

28.3. Notwithstanding anything stated in this Agreement except in case of Force majeure as defined in this agreement, the TPO shall be liable to pay liquidated damages in case of delay in Commencement Date for which TPO is liable. The liquidated damages would be calculated at a rate of 1% of the annual Mining fee (annual contract price) (excluding royalty and taxes) for each week of delay or part thereof subjected to a maximum of 10%.

28.4. Notwithstanding anything stated in this Agreement except in case of Force majeure as defined in this agreement, the TPO shall be liable to pay liquidated damages in case of delay in Commencement of Coal Production Date due to TPO’s delay in deploying the necessary mining equipment, staff and labour and other operational requirements for Coal production. The liquidated damages would be calculated at a rate of 1.00% of the annual Mining fee (annual contract price) (excluding royalty and taxes) for each week of delay or part thereof subjected to a maximum of 10% of the annual mining fee.

29. Recourse to Event of Default

29.1. In case of an event of default, the following recourse is available to SCCL and the TPO or both as the situation may warrant:

29.1.1. In case of occurrence of an Event of Default event mentioned in Clause 28.1 (a) the TPO shall have an option to seek termination of the Agreement. The termination conditions shall be governed by Clause 30.3 of this Agreement. In seeking the termination of the Agreement, the TPO would have to clearly demonstrate that the Event of Default has occurred despite all possible steps taken by the TPO to avoid delay.

29.1.2. In case of occurrence of default event mentioned in Clause 28.1.(b), SCCL shall have the option to seek termination of contract. The termination shall be governed by Clause 30.2 of this agreement.

29.1.3. In case of occurrence of default event mentioned in Clause 28.1.(c) and (d), SCCL shall have the option to seek termination of contract. The


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termination shall be governed by Clause 30.2 of this agreement.

29.1.4. In case of occurrence of an Event of Default mentioned in Clause 28.1.(e), and (f), the TPO shall have the option to terminate the Agreement if the Event of Default is not remedied even after the expiry of three month from the occurrence of the said Event of Default and exhaustion of letter of credit whichever is later. The termination shall be governed by Clause 30.3 of this Agreement. In the event that TPO does not exercise its right to terminate the Agreement and in the Event of Default is remedied by SCCL, the Event of Default shall cease to exist.

29.1.5. In case of occurrence of default event mentioned in Clause 28.1.(g), the affected party shall have the option to seek termination of contract. The termination shall be governed by Clause 30.1 of this Agreement. The conditions of termination by the affected party shall also be governed by Clause 30.2 and 30.3 of this Agreement.

29.1.6. In case of termination of this agreement under the condition mentioned in Clause 28.2, Clause 30.4 of this Agreement shall govern the possible recourse available to the parties.

30. TERMINATION

30.1. Termination for Default

(a) SCCL and/or TPO, as the case may be, shall have the right to terminate this Agreement by delivering a three-month prior written notice to the other Party in the event:

i) On the occurrence of an Event of Default as specified under Clause 30, subject to the terms specified therein.

ii) The other Party is or shall be made insolvent, or goes into liquidation or receivership or if any act is done or event occurs which has a similar effect to any of the foregoing acts or events.

iii) The other Party is in serious breach of any Applicable Law or regulation affecting the Works.

iv) The other Party by its actions or inaction, wrongfully prevents the innocent Party from performing its obligations under this Agreement.

v) The other Party assigns this Agreement without the prior written consent of the innocent Party.

(b) All obligations hereunder incurred prior to and which by their nature would continue beyond the cancellation, termination, or expiration of this Agreement shall survive such termination,


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(c) In the event of the expiration or termination of this Agreement under this Clause, the TPO shall remove from the Coal Mine all the TPO’s Employees, sub-contractors, all it’s Plant and Equipment and its goods and materials from the Coal Mine within 3 months from the time of expiration of the termination notice.

(d) Notwithstanding other provisions of the Agreement, in the event this Agreement is terminated for any reason attributable to SCCL, SCCL is obliged to make payment to the TPO for all Works executed and materials supplied by the TPO up to and excluding the date of termination.

30.2. Termination by SCCL

30.2.1. SCCL may terminate this Agreement by written notice in case of the occurrence of the Event of default as mentioned in Clause 28.1.(a) and/ or 28.1.b. SCCL shall invoke the Performance Bank Guarantee provided by the TPO under Clause 6 as well as seek liquidated damages for a period of 1 (one) year.

30.2.2. SCCL may terminate this Agreement by a three month prior written notice in case of the occurrence of default event mentioned in Clause 28.1.(c) and (d). SCCL shall invoke the Production Bank Guarantee provided by the TPO under Clause 6.3.

30.2.3. SCCL may terminate this Agreement by written notice of at least 3 months to the TPO if any Approval (including any Mining Lease, Pollution Control License, mining technology approval or any other license, permit, consent or permission required for the operation of the Mine) is cancelled, suspended or revoked. SCCL shall invoke the Production Bank Guarantee provided by the TPO under Clause 6.3 in case of such a termination if TPO is responsible to get such permission or license.

30.3. Termination by TPO

30.3.1. The TPO may opt to terminate the Agreement in case of delays in obtaining the necessary Approvals for development and operation of the equipments at Mine if SCCL is the responsible agency to get approvals done.

A termination can be effected by the TPO in case of time delays in Approval exceeding three months from the date on which contract will be executed.

The termination on account of delays in Approvals can be effected during the period between effective date and the Commencement Date [dd/mm/yy]. The termination effected by the TPO would result in SCCL invoking the Performance Bank Guarantee and liquidated damages valued for six month


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in terms of Clause 30.2.1.

In the case of termination by TPO due to 28.1.(a), (e) or (f), SCCL shall reimburse the written down value of the longwall package equipment installed or commissioned by the TPO and TPO shall cease to have ownership on the same.

30.4. Termination due to Force Majeure

If a delay or failure by a Party to perform its obligations due to Force Majeure as provided under Clause 32 below exceeds 3 continuous months, the other Party may immediately terminate this Agreement by notice in writing to the Affected Party. In case of termination of agreement due to Force Majeure, the performance bank guarantee or production bank guarantee as the case may be, shall be returned to the TPO.

30.5. Payment upon Termination

If the Agreement is terminated due to default on the part of TPO, SCCL shall pay the TPO according to the payment terms stated in the Agreement for un-paid coal supplied to the delivery point at surface by TPO up to and including the date of termination, after making adjustments for liquidated damages and serve-or-pay penalties. Such payments to the TPO by SCCL shall be paid within 3 months of the appointment of new TPO or one year of such default, whichever is earlier.

30.6. SCCL May Rectify Default

Notwithstanding anything stated in this Agreement, if the TPO is in default in performance of an obligation under this Agreement, the continuation of which would deprive SCCL of the substance of its bargain under the Agreement, and that default is not rectified within 30 (thirty) days of receipt by the TPO of a written notice from SCCL notifying it of the default, SCCL may without limiting SCCL’s rights otherwise by the Applicable Law, take whatever actions necessary as determined by SCCL to rectify the default itself and recover from the TPO the cost to SCCL of so doing.

31. FORCE MAJEURE

31.1. Force Majeure Events

"Force Majeure" shall mean (with respect to either Party) any event or circumstances or combination of events or circumstances:

(a) beyond the reasonable control of the Party claiming relief under this Clause 31; and

(b) which materially and adversely affects, prevents, delays any Party in the _______________________________________________________________Project Agreement for KTK Longwall Project

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performance of its obligations under this Agreement; and

(c) could not have been foreseen, prevented, overcome or remedied by the affected Party by exercising a standard of care and diligence consistent with Good Industry Practices.

Force Majeure does not include: Breakdown of plant, machinery or equipment and other disruptions which are caused by negligence or otherwise on the part of the TPO and/ or SCCL.

31.2. Suspends Relevant Obligations of Both Parties

If a Party (the “affected party”) becomes unable by Force Majeure to carry out an obligation under this Agreement strictly in accordance with this Agreement:

(a) the Affected Party must give to the other Party prompt written notice and reasonable particulars of the Force Majeure and, so far as is known, the probable extent to which the Affected Party shall be able to perform or be delayed in performing its obligation;

(b) the other Party may give notice to the Affected Party of the extent to which the other Party’s ability to comply with its obligations shall be affected by the Affected Party’s inability to comply with its obligations;

(c) the relevant obligations of the Affected Party and the other Party, so far as they are affected by the Force Majeure, shall be suspended during, but no longer than, the continuance of the Force Majeure; and

(d) the Affected Party must use all possible diligence to overcome or remove the Force Majeure as quickly as possible but the Affected Party shall not have to settle any labour or other dispute creating the Force Majeure on terms contrary to its wishes.

31.3. Parties Must Meet

In the event of either party giving a Force Majeure notice, the parties must meet promptly and each use reasonable endeavors to reach a mutually acceptable solution to alleviate any hardship or unfairness caused by either Party as a result of the circumstances constituting the Force Majeure.

31.4. Mitigation of Loss

Nothing in this Clause 31 prevents SCCL, during the continuation of any Force Majeure claimed by the TPO, from taking any reasonable measure, including engaging third parties to perform the obligations of the TPO, for the purpose of mitigating any loss that it may incur as a result of any such Force Majeure.


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32. CHANGE IN CONSORTIUM OR FORMATION OF CONSORTIUM

32.1. If TPO is a JV or Consortium of the firms and desires a change in the Consortium/JV Company by inclusion/exclusion of members, it shall have to seek an approval in writing from SCCL for such change. The Lead member shall not directly or indirectly, including through merger/ acquisition/joint venture, dilute its stake below 51% in the equity/capital of the Joint Venture / Consortium for the period of at least 7 years after the date of commencement of coal supply to SCCL. If the stake of Lead Member falls below 51% after a period of 7 years after the date of commencement of coal supply to SCCL, and/or if ownership is transferred, consequential loss in any form, including interruption in supply of coal shall be paid by the lead member or the company that takes over the assets and liabilities of the lead member.

32.2. The transfer of ownership shall include transfer of the assets and liabilities of the consortium member/JV partner associated with the coal mining project. Further, the acquiring company shall be assigned the agreement with SCCL including all the liabilities of the coal mining services company with which SCCL has signed the agreement.

33. INTELLECTUAL PROPERTY RIGHTS

33.1. SCCL’s Warranties as to SCCL’s Technical Information

SCCL warrants that SCCL’s Technical Information provided by SCCL to the TPO for the purposes of this Agreement shall not infringe any patent, registered design, trade mark, copyright or other protected right of any third party and SCCL shall indemnify and keep indemnified the TPO for any Claim the TPO may suffer as a result of a breach by SCCL of this warranty.

33.2. TPO Warranties as to TPO’s Technical Information

The TPO warrants that TPO’s Technical Information provided by TPO to SCCL for the purposes of this Agreement shall not infringe any patent, registered design, trade mark, copyright or other protected right of any third party and that TPO shall indemnify and keep indemnified SCCL for any Claim SCCL may suffer as a result of a breach by TPO of this warranty.

33.3. Ownership of any SCCL Technical Information

The TPO agrees that it shall not acquire any right, title or interest in any of SCCL’s Technical Information existing at the Commencement Date or developed by SCCL during the Term and shall not use any of SCCL’s


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Technical Information for a purpose other than performance of the Work..

33.4. Ownership of any TPO Technical Information

All the Technical Information existing at the Commencement Date or developed by TPO or its agents/consultants during the Term of this Agreement which is in relation to this Agreement shall be the intellectual property of SCCL, and TPO shall do all that is necessary to register the same in the name of SCCL.

34. ISSUE AND DISPUTE RESOLUTION

34.1. Resolution Protocol and Arbitration

Any dispute or disagreement between the Parties hereto arising out of or in connection with this Agreement or the performance of any of the obligations of the Parties hereunder or referred to herein, including an issue or dispute as to breach or termination of this Agreement or as to any claim in tort, in equity or pursuant to any statute (“Dispute”)which cannot be resolved amicably by the disputing Parties themselves within 14 calendar days of written notice by one Party to the other Party of the existence of such dispute or disagreement, shall be referred to the Chairman & Managing Director (C&MD) of SCCL who shall have absolute power to appoint arbitrator to whom such dispute shall be refereed for resolution. The decision of the arbitrator appointed by C&MD SCCL shall be final and binding upon both the parties.

34.2. Language

The arbitration shall be held in the English language in as expedient and cost-effective manner as the arbitrator deems feasible, while allowing both parties a reasonable opportunity to present their cases, and the award shall be final and binding, not subject to appeal or contest for any reason whatsoever, except as provided under the Applicable Law, and enforceable in any relevant jurisdiction.

34.3. Jurisdiction

The arbitrator shall have jurisdiction to determine and rule upon any question relating to his or her own jurisdiction and/or the arbitrability of the dispute or disagreement, to render any such interim orders or awards as he or she may deem appropriate at any time during the reference, and also to award any or all costs, including legal costs of the successful Party, against the unsuccessful Party, as he or she may deem appropriate in the circumstances.


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34.4. Continuation of Works

During the course of the arbitration both Parties shall be obliged to continue in the performance of their respective obligations under and in connection with this Agreement. However, if one party refuses or completely fails to continue in performance of its obligations hereunder, the other Party shall have the right, upon written notice to the other and to the arbitrator, to suspend its own performance until such time as the other Party resumes its performance and/or the arbitrator renders an award to the contrary and/or a final award on the merits.

34.5. No Application to Any Court or Administrative Body

Under no circumstances shall either of the Parties at any time make application to any court or administrative body for any relief or order relating to any dispute or disagreement, the Parties hereby acknowledging that their agreement to refer all disputes to arbitration, as set out herein, shall and does divest any court of any jurisdiction which it might otherwise have over the relationship of the Parties hereunder or in connection herewith. Any breach of this Clause (34.6) shall be considered a material breach of this Agreement and the Party so breaching shall reimburse the other Party for any and all costs of whatsoever nature, including but not limited to legal costs and expenses, engendered by such breach.

35. ASSIGNMENT AND SUB-CONTRACTING

35.1. No Sub-Contracting Without Permission

Subject to Clause 35.2, the TPO must not sub-contract its obligations under this Agreement without the prior written approval of SCCL which shall not be unreasonably withheld. Any approval to sub-contract given by SCCL in accordance with this Clause shall not discharge the TPO from any liability under this Agreement and TPO remains subject to all of its obligations under this Agreement. The TPO must ensure any Sub-contractor approved by SCCL observes all the provisions of this Agreement as if the Sub-contractor was a party to this Agreement

35.2. Assignment

Neither party shall assign, mortgage or charge or otherwise deal with this Agreement without the prior written approval of the other party, which approval may not be unreasonably withheld.


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36. NOTICES

36.1. Form of Notice

A notice, request, demand, consent or approval given by one Party to another under this Agreement must be in writing addressed to the recipient at the address shown below (or to the address designated by a Party by written notice):

(a) For SCCL:

Attention:

Address:

Fax:

(b) For [NAME OF TPO]:

Attention:

Address:

Fax:

36.2. When Notice Duly Given

A notice is treated as being duly given if it is signed by the Contract Representative SCCL or the Contract Representative TPO or by an officer of the sender and:

(a) left at that Party’s address

(b) sent by pre-paid mail to that Party’s address; or

(c) transmitted by facsimile to that Party’s address


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36.3. When Notice Duly Given and Received

A notice is treated as have been given and duly received:

(a) when delivered (if left at that Party’s address);

(b) on the third Business Day after posting (if sent pre-paid mail);

(c) in the case of a facsimile transmission, when the transmission has been completed, except if:

i) the sender’s facsimile machine indicates a malfunction in transmission or the recipient notifies the sender of an incomplete transmission within two hours of “receipt” in which case the facsimile transmission is regarded as not having been given or made; or

ii) the time of dispatch is after 17.00 in the place which the notice is received, in which case the notice is regarded as received at the commencement of business on the next Business Day in that place.

37. VARIATION AND WAIVER

37.1. Variation

A variation or waiver of a provision or any amendment of this Agreement is effective only if in writing and signed by the Parties. A variation or waiver is effective only to the extent to which it is made or given.

37.2. No Waiver

A failure, delay, relaxation or indulgence on the part of a party in exercising any Power conferred upon that party by this Agreement does not operate as a waiver of that Power.

37.3. Future Exercise of Power

A single or partial exercise of any Power does not preclude any other or future exercise of it or the exercise of any other Power under this Agreement.

38. AMENDMENT

No amendments or supplements or change orders to or waivers of this Agreement or any provision hereof shall be effective for any purpose unless in writing and signed by an authorized officer or nominated representative of each Party.


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39. GENERAL

39.1. Entire Agreement

This Agreement constitutes the sole and entire agreement between the parties with regard to its subject matter and a warranty, representation, guarantee or other term or condition of any nature not contained or record in this Agreement is of no force or effect.

39.2. No Partnership, Agency or Employment

Nothing in this Agreement constitutes or shall be deemed to constitute a partnership between the Parties or the appointment of one Party as the agent of the other, or the employment of one Party by the other, for any purpose whatsoever. Other than expressly provided by this Agreement, no Party has the authority or poser to bind the other to contract in the name of, and create a liability against, the other in any way or for any purpose.

39.3. Further Assurance

Each Party must do all things and execute all documents necessary to give full effect to this Agreement.

39.4. Counterparts

This Agreement may be executed in two counterparts. All counterparts when so executed shall be effective for the purpose of binding the Parties hereto, and both of which shall together constitute the same instrument.

39.5. Costs

Each Party must pay its own costs in connection with the preparation, completion and carrying into effect of this Agreement.

39.6. Governing Law

This Agreement is governed by Indian law.

39.7. To the Extent Not Excluded by Law

The rights, duties and remedies granted or imposed under the provisions of this


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Agreement operate to the extent not excluded by any applicable Law.

39.8. Language of Contract

Both Parties hereby agree that with regard to the execution of this Agreement for the resolution of any dispute and for correspondence between the parties, the English language is adopted as the contract language.

********* End of Clauses ***********


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IN WITNESS WHEREOF the Parties have caused their duly authorized representatives to execute this Contract in duplicate copies, each of which shall be deemed an original on the date first above written.

For The Singareni Collieries Company Limited

-------------------------------------------------------

For [NAME OF TPO]

---------------------------------------------------------

[NAME OF PERSON}

Designation

Witnessed by:

--------------------------------------------------------

Witnessed by:

-----------------------------------------------------------


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Attachment 1

TERMS OF REFERENCE

The TPO shall provide longwall mining technology and undertake LW panel development and operate the mine for a period of 12 years or achieving a total production of 27.50 million tonnes of coal, as brought out in the NIT and Project Agreement. The TPO is expected to design, engineer, develop, operate and maintain the mine to ensure the supply of coal at a pre-determined transfer point on surface to SCCL at most competitive commercial terms. The mining operations shall involve excavation of coal from the underground, loading, transportation, and delivery of the same at the surface at the pre designated transfer point, maintaining the ventilation and illumination of mine, mine safety, creation of related infrastructure facilities like equipment workshop, pumping from mine activities to the below-ground main sump, maintaining drivage and roads in good working condition etc. The TPO shall be required to abide by all statutory rules, regulations and laws as applicable from time to time including but not limiting to those related to Government licenses, workmen compensation, insurance etc.

The TPO shall undertake the following activities:

(1) Seek and get all required approvals from Directorate General of Mines Safety for the method of mining and technology, deployment of mining machinery, safe working procedures, systematic support rules etc. as required for safe and efficient mine working. SCCL may assist suitably, if so required.

(2) Mining of coal as per approved mine plan. The TPO needs to submit its own mine plan within pre-determined parameters in accordance with SCCL’s requirements and the details provided to him. If any additional data is required, TPO may undertake the studies as per its requirements on its own cost with prior approval from SCCL. The Geological report, the mine plan the EIA and EMP for the project have been formulated and approved by Competent authorities.

(3) Compliance of all regulatory and statutory requirements on behalf of SCCL.

(4) TPO shall satisfy the statutory ventilation requirements at the face and trunk roadways and make necessary arrangements for distribution and coursing of air at the face and at the sealed-off panels at his cost.

(5) Maintenance of safety zone in and around the mine as stipulated by the Coal Mines Regulations, 1957, Safety Rules and regulations as specified under Indian Electricity rules, and/or any other existing or future statutes that may be applicable.

(6) Investing in and providing Longwall mining machinery and other mining machinery for for gate road ways development and extraction of longwall panels, mining coal and transport of the same to the designated transfer


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point on surface. The TPO shall also arrange mining machinery for drivage of gate road ways as per the sequence of longwall panels planned in the Project.

(7) Deployment of auxiliary equipments to support mining operation.

(8) Strata monitoring as required as per scientific LW Mining requirements and also as required by DGMS or other statutory bodies.

(9) TPO shall make arrangements to distribute and stabilize the voltage, supplied by SCCL free of charge at surface sub-station, to counteract any fluctuations of drop on the voltage of the electricity supply. TPO is required to specify total power requirements for all equipment proposed to be deployed and specific power consumption. Further, TPO shall ensure transmission and use of electric energy at a power factor of not less than 0.9.

(10) Drilling and blasting of coal for cross cut drivage for connecting Gate road and Trunk road by deploying SDL or an alternate system suggested by the TPO subject to SCCL’s approval.

(11) Providing mine support system for safe and stable mine working.

(12) Deployment of Powered support at longwall face of sufficient capacity.

(13) Construction, maintenance and operation of mine-dewatering arrangement upto the main sump of the mine. TPO shall undertake dewatering arrangement from mine workings upto mine sump. From main sump, water will be pumped by SCCL. Drainage of gate road drivages and Longwall face up to the main sump of SCCL shall be the responsibility of TPO

(14) Construction and maintenance of canteen for his employees

(15) Construction and maintenance of rest shelters, miner’s station, first aid stations, firefighting stations etc. as required by law and for safe working of mine.

(16) Establish suitable communication network between mine workings and surface.

(17) Drinking water supply arrangement in underground,

(18) Construction and maintenance of internal power supply arrangements.

(19) Provision for mine illumination as per prevalent laws.

(20) Use of explosives according to laws in safe working conditions. Explosives shall be supplied by SCCL, at Mine Magazine on chargeable basis.

(21) Provision of all the consumables required for the operation and maintenance of equipment.

(22) Arrangement of petrol/diesel, oil and lubricants.

(23) Compliance of specific conditions under environment and other clearances with development and operation of coal mine.


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(24) Transportation of coal upto the designated point at the surface (pre-weigh bin(s)).

(25) Transportation of men and material from the surface including transportation of heavy machinery.

(26) Issue of photo identity cards to each worker duly signed by TPO.

(27) Arrangement for vocational training to the workmen and establish vocational training center. If required, TPO shall make arrangement for regular training program for his employees for the safe working of mine.

(28) Issuance of passes/tokens to the persons employed.

(29) The TPO shall make all arrangements for ensuring safety standards as required by law & conforming to best industry practices. The TPO shall also provide for prevention of occupational health disorders and creation of good work environment. In case of any breach and hence, penal sanctions on SCCL, the same shall be borne by the TPO over and above the penalties for loss of production. TPO shall indemnify SCCL in such occurrences.

(30) The TPO shall adhere to the approved Environmental Management Plan and shall make necessary investments and expenses to mitigate all environmental risks. In case of any breach and hence, penal sanctions on SCCL, the same shall be borne by the TPO over and above the penalties for loss of production.

(31) The TPO shall adhere to the approved Mine safety plan and shall make necessary investments and expenses to mitigate all safety related risks. In case of any breach and hence, penal sanctions on SCCL, the same shall be borne by the TPO over and above the penalties for loss of production.

(32) Sealing of goaved out longwall panels and drainage, inspection and environmental monitoring of the goaved out longwall panels.

(33) The TPO shall be responsible for maintenance of attendance for persons engaged by him in appropriate register and for producing the same for inspection as and when demanded by the Manager/Agent or any other authorized persons from SCCL or DGMS.

(34) TPO shall take up the development of trunk roadways also as per the projections of SCCL after finalization of the contract.

(35) Any other requirement as per scientific LW mining practices and/or compliance of all statutory/non-statutory stipulations/directives /instructions/obligations of DGMS/state/central/local governing bodies etc, for smooth execution of the project.

(36) Any other activity incidental to construction, operation and maintenance of the mine, apart from the indicated list as above.


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(37) The TPO shall make all arrangements for ensuring safety standards as required by the laws and the best industry practices. The TPO shall also provide for prevention of occupational health and creation of good work environment. In case of any breach and hence, penal sanctions on SCCL, the same shall be borne by the TPO over an above the penalties for loss of production. TPO shall indemnify SCCL in such occurrences.

SCCL shall undertake the following activities:

(1) SCCL shall operate the 3 lakh / 150 m/sec (as measured in the fan drift) Main Mechanical Ventilator already installed for the purpose.

(2) Drivage of tunnels from the surface has already been completed.

(3) Proposed inter-seam tunnels, as per approved mine plan are being driven by SCCL.

(4) Sinking of Return air shaft.

(5) Trunk roadways drivage until the contract is finalized.

(6) Required electrical power at 6.6 KV or higher shall be provided by SCCL free of cost at the surface sub-station.

(7) Pumping from the below-ground main sump will be done by SCCL.

(8) Water supply (raw/drinking) at designated point on surface.

(9) Provision of explosives at pit magazine on chargeable basis.

(10) Covered and unfurnished ware house, space for office and a maximum of twenty block (twin room) accommodation shall be provided by SCCL in “as is where is” condition. Electricity charges for such accommodation shall be borne by TPO.

(11) Medical assistance to the employees of the TPO can be provided by SCCL to the extent the facilities are available at SCCL Bhoopalpalli Area Hospital on chargeable basis.


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Attachment 3

PRODUCTION SCHEDULE

Year-wise production schedules

(Million Tonnes)

Year Development Longwall Total

1st year 0.25 0 0.25

2nd year 0.25 1.00 1.25

3rd year 0.25 2.50 2.75

4th year 0.25 2.50 2.75

5th year 0.25 2.50 2.75

6th year 0.25 2.50 2.75

7th year 0.25 2.50 2.75

8th year 0.25 2.50 2.75

9th year 0.25 2.50 2.75

10th year 0.25 2.50 2.75

11th year 0.25 2.50 2.75

12th year 0 1.25 1.25

Total 2.75 24.75 27.5


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Attachment 4

SCHEDULE OF RATES

ITEM DESCRIPTION

RATE (INR PER TONNE OF

COAL)

Year 1

Cost of Coal at the surface (includes the

following costs)

1 Mining Fee

Note: Only 60% of Mining Fee shall be escalated based on the escalation formula provided in the bid document.


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Attachment 5

Major Items of TPO's Equipment

NO EQUIPMENT TYPE

DESCRIPTION (TYPE and Specification)

NO. OF EACH

NEW or USED CAPACITY


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Attachment 6

Contact Details – The Singareni Collieries Company Limited and their Representatives

Chief General Manager (Purchase)

The Singareni Collieries Company Limited,

Kothagudem Collieries, (PO) Khammam District

Andhra Pradesh, Pin: 507101

Phone:

Fax:

e-mail id:


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Attachment 7

Contact Details of [NAME OF TPO] and their Representatives


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