Process initiated nearly half a decade back yet to reach logical conclusion

Only Rs 4.5 cr earned in 10 yrs despite huge reserves

Mohinder Verma
JAMMU, Feb 16: The process for scientific exploration and exploitation of sapphire mines in Paddar area of Kishtwar district which was set into motion nearly half a decade back has yet not reached the logical conclusion due to procedural and administrative delays. Moreover, no time-frame can still be specified for obtaining optimum benefit of the reserves as the proposal is required to be cleared by three important forums.
The sapphire mines are situated at an altitude of 4442 meters above sea level in the remote area of Padder and State Government vide SRO-48 dated February 11, 1988 reserved entire area of sapphire mines in Sumcham for exploitation by J&K Minerals Limited.
The lease was granted by the State Government in favour of J&K Minerals Limited vide Order No.18-IND of 1989 dated January 20, 1989 and was renewed vide Government Order No.128-IND of 2016.
In view of the fact that mine reserves, investment and viability of the project are not determined, the J&K Minerals Limited had earlier decided to develop the mines on terms and conditions suitable to the State Government but attempts made in this regard turned futile for varied reasons including involvement in litigation at the instance of various interested parties.
Official sources told EXCELSIOR that fresh tendering process was initiated at global level by the J&K Minerals Limited in April 2013 and in response to Expression of Interest, six parties from within and outside the country expressed willingness for scientific exploration and exploitation of the sapphire mines in joint venture.
However, only five parties were shortlisted by Tender Opening Committee constituted for the purpose and a Request for Formal Proposal (RFP) was circulated among them for the purpose of obtaining final bid.
In the meanwhile, as per the advice of Finance and Law Departments, tendering process for appointment of Transaction Advisor was also initiated in October 2016 and successful firm was appointed on January 24, 2017 as Transaction Advisor to oversee the bid process and for undertaking technical evaluation of the RFP including fixing of qualification criteria for JVC and parameters for selection of JV partner, sources informed.
Out of five, only two shortlisted parties submitted RFP well before last date fixed for the submission of final bid—November 24, 2016 whereas one offer was received after due date and the remaining two parties didn’t chose to respond, sources further informed.
On the recommendation of the Tender Opening Committee, the RFP received after due date was rejected unopened and the Transaction Advisor was requested to undertake technical evaluation of RPF received from remaining two shortlisted parties.
The Board of Directors of J&K Minerals Limited in its meeting held on December 4, 2017 discussed the technical evaluation report submitted by the Transaction Advisor and desired that the report shall be submitted by J&K Minerals Limited to Technical Scrutiny Committee for further analysis so that the matter is placed before the Special Board of Directors meeting for further discussion and for making appropriate decision before referring the same to State Cabinet for consideration and approval to the selection of technically and financially suitable partner for undertaking both exploration and exploitation of the sapphire mines.
However, the Technical Scrutiny Committee has yet not given its opinion, sources said, adding “in this way the process initiated nearly five years back has yet not reached the logical conclusion till date”.
Expressing inability to specify the time-frame for completion of the exercise, sources said, “the opinion to be rendered by the Technical Scrutiny Committee will have to be cleared by the Board of Directors before submission to the Cabinet”, adding “the Cabinet in all probability will refer the matter to the Cabinet Committee on Economic Affairs headed by the Finance Minister”.
“In the absence of scientific exploration and exploitation, J&K Minerals Limited has earned only Rs 4.5 crore during the past 10 years by conducting auction of rough sapphire collected from the screening of mine spoil and digging of trenches”, sources disclosed.
Of Rs 4.5 crore, an amount of Rs 131.97 lakh was generated in 2007-08, Rs 74.70 lakh in 2009-10, Rs 112.31 lakh in 2011-12, Rs 43.28 lakh in 2012-13 and Rs 88.62 lakh in 2015-16. During the past two years no auction of sapphire was conducted by J&K Minerals Limited.

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