Kick-starting the process of restructuring Coal India Ltd, the government on Monday invited bids for appointment of advisors to restructure the nation’s largest coal producer.
The development follows the Coal Ministry informing the Prime Minister’s Office of the appointment of consultants with international expertise and frame timeline to take forward the proposal on restructuring of the state-owned miner.
“Ministry of Coal invites expression of interest (EOI) from the consultancy firms/organisations for taking up the job of providing consultancy for restructuring of Coal India (CIL),” the Coal Ministry said.
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The Planning Commission and many high-level panels, including Expert Committee on Road Map for coal sector reforms — also known as T L Shankar Committee — recommended restructuring of CIL keeping in view the rapidly increasing demand of coal and the need for enhancing coal production and to make the coal sector competitive.
It has been proposed to take up a study, “to assess the need for restructuring of CIL in light of the avoidance of drawbacks inherent in a monopolistic situation,” and “to prepare a road map for smooth transition towards proposed restructuring,” among others, the ministry said.
The Planning Commission has earlier suggested spinning off CIL subsidiaries into separate entities so that each one of them can pursue its own goals, amid growing supply deficit of coal.
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“The industry would be better served if the subsidiaries were spun off as separate public sector companies, encouraged to develop their own strategies of coal development including joint venture activities and acquisition of assets abroad,” said the 12th Five Year (2012-17) Plan document.
World’s largest coal miner CIL has seven subsidiaries such as Bharat Coking Coal Ltd (BCCL), Central Coalfields Ltd (CCL), and Eastern Coalfields Ltd (ECL) and Central Mine Planning and Design Institute Ltd. The coal producer has 3.71 lakh employees.
The document also recommended setting up of a high-level committee with the task of examining the option and asking it to submit a report within six months.
The Planning Commission has estimated that the coal import could go up to 185 million tonnes (MT) at the end of the 12th Plan based on total coal demand of 980 MT and domestic supply of 795 MT.
Imports could further increase if the domestic production does not grow by 8 per cent as projected. India’s coal output was 540 MT during 2011-12 against the demand of 640 MT.