Tokisud Block-Report On Due Diligence Study

India Power Corporation (Haldia) Ltd.
, India
Tokisud North Coal Mine Block - Jharkhand
Report on Due Diligence Study of Existing Mining Infrastructure
February, 2015
MAKNAN
India Power Corporation (Haldia) Ltd., India MAKNAN
CONFIDENTIAL
Issue and revision record
Revision Date Originator Approver Description

A 16th. February,2015 CM SKN Final Report
This document is issued for the party which We accept no responsibility for the consequences of this
commissioned it and for specific purposes document being relied upon by any other party, or being
connected with the above-captioned project used for any other purpose, or containing any error or
only. It should not be relied upon by any other omission which is due to an error or omission in data
party or used for any other purpose. supplied to us by other parties.
This document contains confidential information and
proprietary intellectual property. It should not be shown to
other parties without consent from us and from the party
which commissioned it.
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Contents
Chapter Title Page
1 Introduction
1.1 Introduction___________________________________________________ 4
1.1.1 Client______________________________________________________ 4
1.1.2 Project_____________________________________________________ 4
1.1.3 Study Background____________________________________________ 4
1.1.4 The Consultants______________________________________________ 4
1.2 Scope of Work______________________________________________ 5
1.2.1 Defined Scope of Work _______________________________________ 5
2 Methodology
2.1 Approach & Methodology _____________________________________ 6
2.2 Site Visit & Data Collection _____________________________________ 7
3 Information Review
3.1 Information Review / Data Assessment _______________________ _ 15
3.1.1 Quantity & Cost Estimate______________________________________ 15
3.1.2 Comparison & Variance ______________________________________ 18
4 Recommendation
4.1 Summary of Observations______________________________________ 19
4.2 Critical Areas of Attention______________________________________ 20
4.3 Recommendation and Conclusion _____________________________21
4.4 Caveats ____________________________________________________21
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1. Introduction
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1.1 Introduction
1.1.1 Client
India Power Corporation (Haldia)

Ltd. (PCI) is a power utility
company in the business of power
generation as well as distribution.
PCI as group is known for wind
power regeneration and other non
conventional energy sources. In
conventional thermal power
generation PCI has big plan of
power generation in West Bengal.
Swaymbhu Natural Resources Pvt.
Ltd. (SNRL) is the mining company
engaged in coal mining for captive
use of PCI.
1.1.2 Project
Project involves due diligence

study of existing mining
infrastructure created in Tokisud
North Coal Mine Block on as is
basis
1.1.3 Study Background
As per the Coal Mines (Special

Provisions) Ordnance, 2014, the
previous allotee of said coal block
was instructed by GOI to declare
the details of physical
infrastructure created by the
previous allotee along with others
in prescribed format.
The objective of exercise is to
assess the NPV of the Block for
open auction for reallotment to
eligible entrepreneur.
Now, India Power Corporation
(Haldia) Ltd. (PCI) along with SNRL
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 Railway Sidings
 Approach roads and
internal roads
 Road bridge over river
Damodar
 Rehabilitation Colony
 Coal Handling Plant
 Electrical Substation
 Explosives Magazine &
other buildings / units
2.1.1.2 Cost estimation based on
prevailing market rate and the
quality of construction.
2. Methodology
2.1 Approach & Methodology

The methodology for this exercise has
been finalized in consultation with
PCI/SNRL. As drawings are not available
to study and assess the NPV of
infrastructures created at site, the
possible approach would be to visit site
and make visual inspection of assets like
buildings, roads, railways, equipment
foundation and structure, thereby
making a rough record of size &
dimensions, type and extent of
construction of infrastructures as existed
on date of inspection.
Based on the records of data so collected
cost of construction shall be estimated
based on local rates of material and
labour or as per latest CPWD schedule of
rates in absence of such data.
Finally the exercise will be to compare
the cost so calculated vis-à-vis the
declared cost as submitted by the
previous allotee and establish the
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variance as found.
2.2 Site Visit & Data Collection

In view of the above joint site visit was
made on 12th. & 13th. January, 2015
and following information was collected.
Railway Sidings
There was restriction in collecting data

for security reason. As such no
photography was permitted during the
visit.
During the brief stay within the premises
following were noted.
 Compound wall is complete
except some part in northeast
side where the approach road is
likely to be connected.
 Unrestricted road level crossing
through the sidings is in service.
 All three tracks are laid but final
alignment of rails yet to be made.
 Posts for OHET are erected but
conductors are yet to be
connected.
 It is informed that civil work for
in motion weighbridge is
complete but equipments yet to
be erected and commissioned.
 Concrete loading platform on
either side of the tract is
constructed however the load
arrangement is yet to be made.
 The area is site leveled for laying
the track. However micro leveling
and finishing work yet to be
taken up.
 Quarters for Railway staffs are
under construction.
Approach Roads and Internal Roads
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During the visit the village road more or
less along the proposed approach road
from Mine head to Railway siding was
followed. Following observations were
made.
 Corridor for proposed road has
been demarcated with pillars at
intervals.
 Width of corridor appears to be
50 m.
 Tree falling is done in most
places, however total clearing of
bushes etc. is not done.
 No major water course requiring
cross drainage work is noticed.
After crossing the bridge over Damodar ,

the road upto mine head supposed to be
along the western fringe of the mines
quarry was not constructed. In fact
existing village roads trough the quarry
area was upgraded and renovated upto
the RR colony presumable for movement
of machines and materials during
construction. Following observations
were made for internal roads.
 Width of road from bridge to CHP
area is not more than 3.5 m.
From CHP to RR colony the road
is wider and appears to be 5.0 m
wide.
 Apparently no WBM construction
has been carried out in most part
of the road, except last part near
RR colony (1.2 Km.)
 Only grading of the road surface
has been done with excavated
material from either side of the
road forming ditch drain.
 Internal roads should not be
considered as all weather roads.
 Pipe culverts (5 no.) with 600 dia
RC pipes and 350 thk. Brick end
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walls are found.
Road bridge over river Damodar
Bridge was approximately 10.5 m wide

RCC girder bridge with 10 intermediate
span of 20 m each with abutments on
either end. Total length as reported is
255 m. Following features were noted.
 Carriage way width available is
about 8.0m with 1.25 m wide
footpath and parapet wall on
either side.
 Approach portion of the bridge
on either end with river training
work is incomplete.
 Some protection work around
intermediate piers need also to
be done.
 Bridge girder is made of 3
longitudinal beams connected by
deck slab
 All pier heads are provided with
2X3 number bearings
 No wearing course is noticed
over deck slab.
Rehabilitation Colony
Rehabilitation colony is developed in

north western end of mining lease area.
For developing this colony exiting Aswa-
Urej-Ango portion of state road was
locally diverted and development was
done on either side of main road.
Following observations were made and
data collected during the visit.
 Colony is well planed with
portion of renovated state road
as arterial. Cross roads are made
in suitable locations on either
side.
 Service roads are provided to
connect to all residential units
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and amenity buildings.
 Service facilities like Overhead
Water Tank & pumping station
for water supply and Transformer
for power supply are located at
the end of the development.
 Within the colony area all roads
are concrete roads with brick
drains on either side.
 The width of the roads are:
Arterial Road = 10 m
Main Cross Roads = 7 m
Service Roads = 4 m
 There are two types of housing
quaters, namely TYPE-A & TYPE-
B. Both are two storied
construction.
 These buildings are made of load
bearing brickwork of one brick
thick with RCC roofs. The rooms
are so planned that no beam is
required to be made.
 Each housing quarter is provided
with a external Toilet block
comprising of one Indian type
WC & a Bath/Wash room. This
blocks are made of brick wall and
low level roof (2.4m high). There
is one 500 litre capacity PVC roof
tank connected to water supply
system.
 While TYPE-B quarters are of
bigger size with a staircase ,
TYPE-A quarters are more
informal with open stair &
passages.
 Construction specification for all
the buildings in the colony is
identical with IPS flooring,
internal plaster with white
washing & external plaster with
colour washing.
 Doors are made of steel T-frame
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and flush door shutters made of
commercial plywood. Windows
are fully glazed steel windows.
 Other than residential quarters
there are one school, community
centre cum shopping area and a
medical dispensary.
Coal Handling Plant
Coal Handling Plant is located at west of

proposed quarry area. It is about 1.2 Km.
from state road near RR colony and
about 5.0 Km. from Railway Sidings. CHP
was visited on first day of the visit and
following were noted.
 At the entry there is a fenced

area with offices made of pota
cabin. Electrical installation is
also within this area.
 On right side of entry massive
RCC foundation construction
apparently for the retaining
structure of proposed ramp,
ROM hopper & primary crusher
plant is noted.
 Raft part is more or less complete
with one lift of main retaining
wall & counterforts.
 Rafts for several foundation for
supporting structures of Hopper,
Primary Crusher & conveyors are
completed with one or two lifts
of concreting for pedestals’
 On left side of entry entire block
of office building (750 Sq.m) is
constructed upto roof level
without the roof
 Electrical control room is
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constructed with roof internal
cable trenches and two outdoor
transformer foundation,
 About ten pieces of conveyor
galleries are fabricated and lay
scattered within the area.
 Concrete supporting structures of
coal stock silos are constructed
apparently upto 10 m above
ground.
 Tertiary hoppers for quick loading
system are already erected.
However conveyor structures
from either primary crusher or
stock silo is yet to be made.
 Several mechanical equipment
including complete primary
crusher unit, conveyor belts,
cables are found to be delivered
at site.
Electrical Substation
Main electrical substation which was

planned to be constructed within or near
Railway Sidings is not started yet.
The route plan for 33 Kv power line from

DVC substation near Patratu to MRSS is
not yet finalized.
It appears from local people there may

be a change of plan and power presently
drawn from JSEB source may be further
increased to meet the ultimate power
need. However this could not be
authenticated by any reliable source.
Explosives Magazine & other buildings /

units
Explosive Magazine building is located at

north of Quarry area, apparently near
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the margin of lease hold land. The
building is presently approachable from
state road 1.6 km. east of RR colony. The
site was visited on 2nd day of visit and
following information was collected.
 Magazine building (15mX5m) is

located at the centre of a walled
compound (40mX35m) with
about 3.0 m high masonry wall
with barbed wire on top.
 There is internal road around the
building with peripheral drain.
 Building and internal road are
found to be complete .
 There is only one entry gate, fully
sheeted with angle frames.
 There is also external road all
around. The construction is done
upto subbase preparation only.
Peripheral drain is also under
construction.
 The building is made of 1.5 brick
thick brick wall with RCC roof.
 There is an inner chamber with
wall lined with wooden strip.
There is also ante room at entry
to the building.
 Doors are made of 40 thk. Wood
plank, outer face covered with
steel sheet metal. Window is of
same type.
 There are ventilators with wire
nettings at entry & exit, reported
to be skew or Z-type ventilators.
 There is a watch tower building
outside the compound.
No other major building or unit was
noticed except couple of community
facilities like place of worship, rest room
etc.
At the end the proposed DVC substation
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was visited, however no useful
information could be collected.
3. Information Review
3.1 Information Review / Data Assessment
3.1.1 Quantity & Cost Estimate
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3.1.2 Comparison & Variance
Sl. Description of Item Cost Furnished as Cost Assessed in Remarks

No. on 31.3.2014 the Study
1. Raiway Sidings ₹ 23.08 Crores ₹ 31.45 Crores Work not

completed
2. Approach Roads and ₹ 8.02 Crores ₹ 0.40 Crores Work claimed
Internal Roads to be carried
out in State
Road (Aswa to
Urej) part
could not be
assessed
3. Road bridge over river ₹ 13.64 Crores ₹ 16.00 Crores Work not
Damodar completed
4. Rehabilitation Colony
Housing Quater Type -A ₹ 4.41 Crores ₹ 3.47 Crores
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Housing Quater Type -B ₹ 5.20 Crores ₹ 3.70 Crores
Community Hall ₹ 0.23 Crores ₹ 0.12 Crores
Dispensary ₹ 0.24 Crores ₹ 0.12 Crores
Primary School ₹ 0.69 Crores ₹ 0.35 Crores
Roads & Pavements ₹ 1.58 Crores ₹ 0.96 Crores
Water Supply ₹ 0.69 Crores ₹ 0.53 Crores
Site Grading ( 41 Acre ) ₹ 10.18 Crores ₹ 10.18 Crores not assessed
Power Supply, & misc. ₹ 0.56 Crores ₹ 0.56 Crores not assessed
Sub Total = ₹ 23.78 Crores ₹ 19.99 Crores
5. Coal Handling Plant ₹ 9.48 Crores ₹ 2.98 Crores Only Civil &
Structural
work assessed
6. Electrical Substation Nil Nil
7. Magazine Room Etc. ₹ 0.27 Crores ₹ 0.29 Crores
4. Recommendation
3.1 Summary of Observations
It is generally observed that the
infrastructures were created with
care and meant for long term use.
Proper planning as required for this

kind of development was noticed
except in development of internal
roads. This might be due to the fact
that these roads are of temporary
nature and would be defunct as
the mining operation progressed.
Rehabilitation colony has been

made nicely with full satisfaction of
the displaced people. There was
already a community feeling
among the residants, which will be
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useful factor for mining operation
in the region.
Cost indicated by the previous

owner is apparently reasonable to
general market condition.
Quantities assessed are more or
less correct.
However the region has certain

advantage as per as cost of
building materials like bricks,
stones, sand, moorum etc. The cost
advantage for this factor is not
reflected in cost calculation
provided to the authority.
Certain unexplained cost

components were also noticed
while going through the document
provided.
3.2 Critical Areas of Attention
 Construction of protective
embankment along the
bank of River Damodar is
extremely important for
long term operation of this
mining block. The river is
critically meandered around
the Coal block and there
are tendency of scouring in
the inner banks and
deposition in outer banks.
There are several horse-
shoe lake formation in this
river.
 As no work has been taken
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up yet this will be the
priority area in future and
requires further
investigation and massive
capital expenditure.
 Traditional mining
infrastructure like HEMM
workshop, other repair and
maintenance facilities are
yet to be developed too.
 Aspect of availability of
power and connectivity is
not transparent yet This
may also require capital
expenditure and obstacles
may be faced in establishing
right of way.
 Work for approach road

from Railway sidings to
Mine head is practically not
started yet. This will also be
a priority area in future.
3.3 Recommendation &

Conclusion
It may be concluded that
infrastructures created by the
previous allotte is good and for long
term use, though the cost is
exaggerated. However it is also to be
noted that price of assets will
appreciate considerably and excess
land acquired will be of value in
developing further downstream
industry.
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The site is recommended as good
bargain with respect to long term
investment.
3.4 Caveats
The inferences, opinions, comments
indicated by Consultant are based on
the data provided by Client,
information collected during site
visit and discussions with SNRL
team.
The overview indication of current

cost of the asset is for internal
reference only; and is based on a
very quick assessment of the
information provided by client in
terms of timeline, value of original
contract and further insights of
Consultants. Cost has not been
assessed with a detailed evaluation
of construction costs, and thus
MAKNAN shall not be liable for any
references towards these, by
external sources.
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India Power Corporation (Haldia) Ltd.

Issue and revision record

Revision Date Originator Approver Description

Chapter Title Page

India Power Corporation (Haldia)

Project involves due diligence

1.1.3 Study Background

As per the Coal Mines (Special

2.1 Approach & Methodology

2.2 Site Visit & Data Collection

There was restriction in collecting data

Approach Roads and Internal Roads

After crossing the bridge over Damodar ,

Road bridge over river Damodar

Bridge was approximately 10.5 m wide

Rehabilitation colony is developed in

Coal Handling Plant

Coal Handling Plant is located at west of

 At the entry there is a fenced

Main electrical substation which was

The route plan for 33 Kv power line from

It appears from local people there may

Explosives Magazine & other buildings /

Explosive Magazine building is located at

 Magazine building (15mX5m) is

At the end the proposed DVC substation

3.1.2 Comparison & Variance

Sl. Description of Item Cost Furnished as Cost Assessed in Remarks

1. Raiway Sidings ₹ 23.08 Crores ₹ 31.45 Crores Work not

Proper planning as required for this

Rehabilitation colony has been

Cost indicated by the previous

However the region has certain

Certain unexplained cost

3.2 Critical Areas of Attention

 As no work has been taken

 Work for approach road

3.3 Recommendation &

The overview indication of current

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