Nirmal Chandra Jha got into the ‘hot seat' on March 1, 2011, almost by default, after the appointment of the person set to pick up the baton of the chairman of the world's single-largest coal producing company, Coal India Ltd (CIL), got mired in delays over approvals. But, Mr. Jha, then Coal India's Technical Director, slipped into his new shoes with ease.
Mr. Jha, a mining engineer, has spent over 37 years in CIL, having joined as a management trainee in January 1975. Although his official designation was that of an acting chairman, he handled the jobs of two functional directors — technical and marketing — as well as that of the CMD of a subsidiary company. His tenure saw many major decisions being taken, including the controversial changeover to a new pricing system for coal. As he is readying to lay down office on January 31, he talks to Indrani Dutta on his stint at CIL.
CIL's production has not been remarkable this year, why?
The annual production target, after discussions with the Planning Commission, was fixed at 447 million tonnes. Internally, our target was higher at 452 million tonnes in order to get an excellent rating in the memorandum of understanding that we signed with our ministry.
However, this had to be revised to 440 million tonnes in November as monsoons took a heavy toll on production and we slipped by 26 million tonnes till October. We have been trying to gear up ever since in an effort to at least reach 440 million tonnes but the asking rate is very high, around 1.7 million tonnes a day, need to be produced. At present, the subsidiaries have been able to produce 1.5 million tonnes daily. The CMDs of the coal companies have promised me 440 million tonnes but with each passing day that it is looking tougher.
You have had a negative growth for a few months of the fiscal
Production between April 1, 2011 and January 17, 2012, was 311 million tonnes against 390 million tonnes produced in the same period last fiscal. The major reason was the backlog that we faced due to the extremely adverse weather conditions.
The year's target of 447 million tonnes needed a modest growth of 4.9 per cent. Unfortunately, the monsoon played havoc and we had negative growth.
We have been able to ramp up production since October and make-up some of the lost ground and every month since November, production has increased in the range of 5-7 per cent.
However, our greater problem and one with longer term ramifications is that of issue of land and the statutory clearances needed for commencing coal production in a new area as well as for expanding production in existing projects. For almost two years, between January 2010 and now, hardly any proposal has crossed the environment and forest hurdles. Issues like CEPI (Comprehensive Environment Protection Index) has put Coal India back by at least two years.
As on date, we have over 170 forestry proposals awaiting clearance. We are facing newer terms and conditions every time a proposal is taken up. Give me land and I will give you coal. I have no war with the environmentalists. But a discussion is needed to find out which is more important, to find out whether the country needs coal.
The period seems to have been a particularly challenging one – could you maintain your supplies to the power sector?
The period indeed was a challenging one but we could deliver our best to the power sector.
Till November 30, the percentage of coal supply was 91 per cent. It is even higher now and had touched 105 per cent in December.
Is the wage revision issue anywhere near solution?
No, it has not been settled. We have made our offers on aspects such as the minimum guaranteed benefits but subject to certain conditions. The 54-member Joint Bipartite Council for the coal industry suggested that a smaller committee be formed to examine a few other aspects. We have scheduled a meeting for January 27 when we will be able to decide whether matters are at a conclusive stage or whether further talks are necessary.
Tell us about the new system of pricing, which seems to have kicked up a storm?
You see world-over, coal is supposed to be sold on heat value. We were earlier using UHV (useful heat value) system which was an empirical value.
We have now theoretically consented to base our prices on actual heat value (gross calorific value).
We have merely tried to rationalise the pricing system which was earlier highly uneven.
We will run it for three months and then analyse the coal company's revenues to find out the impact to see if any correction is needed.
What happened at the meeting in Delhi?
It was decided to take a relook at the prices, to examine whether there is a high incidence in some segments. This matter will be taken to the board when it meets in February. But billing will continue on the GCV basis.
