Coal In­dia not to be split; seven sub­sidiaries may spin-off: Goyal

He be­lieves the prob­lems can be fixed by keep­ing Coal In­dia as one co

The Political and Business Daily - - FRONT PAGE -

PUTTING spec­u­la­tion of break­ing up state be­he­moth Coal In­dia to rest, Power and Coal Min­is­ter Piyush Goyal has said the new govern­ment will not split the world's largest coal miner but will work to smoothen the edges and im­prove its per­for­mance.

The new govern­ment wants to fix the coal sec­tor quickly to en­sure un­in­ter­rupted elec­tric­ity sup­ply across the coun­try. Coal is the cheap­est fuel and is used to gen­er­ate more than half of In­dia's power.

In­dia is home to the world's fifth-largest re­serves of coal but de­lays in en­vi­ron­men­tal ap­provals, land ac­qui­si­tion prob­lems and in­ef­fi­cient sys­tems have made the coun­try the third-big­gest im­porter.

Banker- turned- politi­cian Goyal, 50, be­lieves the prob­lems can be fixed by keep­ing Coal In­dia Ltd (CIL) as one com­pany.

"We have been as­sess­ing the per­for­mance of Coal In­dia in great de­tail and I think there is a lot of po­ten­tial to smoothen the edges and en­hance the pro­duc­tion at dif­fer­ent mines," he told PTI in an in­ter­view here.

He saw great strength and ben­e­fit in keep­ing CIL, which ac­counts for 80 per cent of In­dia's coal out­put, as one com­pany in­stead of con­vert­ing its seven units into in­de­pen­dent en­ti­ties to un­lock value and in­crease ef­fi­ciency.

"I think while that can en­hance the val­u­a­tion of the com­pany on the stock mar­ket, I don't see that (com­bined hold­ing) as an im­ped­i­ment to good per­for­mance," he said.

CIL, which missed its out­put tar­get of 482 mil­lion tonnes by pro­duc­ing 462 mil­lion tons of coal in 2013-14, has seven sub­sidiaries -- South-East­ern Coal­fields Ltd, Ma­hanadi Coal­fields Ltd, East­ern Coal­fields Ltd, Bharat Cok­ing Coal Ltd, Cen­tral Coal­fields Ltd, Western Coal­fields Ltd and North­ern Coal­fields Ltd.

South-East­ern Coal­fields and Ma­hanadi Coal­fields to­gether ac­count for more than half of the com­pany's to­tal out­put.

CIL was es­tab­lished in 1975 as a state-owned en­tity. In 2010, it sold 10 per cent of its shares in the na­tion's largest ini­tial pub­lic of­fer­ing. Its cur­rent mar­ket cap­i­tal­i­sa­tion is Rs 2,41,379.87 crore.

Ex­plain­ing the pros of a hold­ing com­pany struc­ture, Goyal said, "That struc­ture is bet­ter in terms of syn­ergy of op­er­a­tions, mov­ing talent and ex­per­tise..."

The min­is­ter is of the view that one com­pany will be able to ad­dress the is­sue of ra­tio­nal­is­ing coal link­ages, which help in plan­ning sup­plies.

Link­ages should be made more ef­fi­cient so that mines sup­ply coal to the near­est power plants, help­ing to save freight costs, which can be passed on to con­sumers, or to re­duce losses of dis­coms, the min­is­ter added.

In Jan­uary last year, the coal min­istry in­vited con­sul­tants to study the re­struc­tur­ing of Coal In­dia.

We have been as­sess­ing the per­for­mance of CIL in great de­tail and I think there is a lot of po­ten­tial to smoothen the edges and en­hance the pro­duc­tion at dif­fer­ent mines. I think while that can en­hance the val­u­a­tion of the com­pany on the stock mar­ket, I don't see that (com­bined hold­ing) as an im­ped­i­ment to good per­for­mance

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