No plans to split Coal India: Piyush Goyal
30 June 2014
The government has no plan to split Coal India Ltd (CIL), the world's largest coal miner, union minister of power and coal Piyush Goyal said, putting at rest speculation over breaking up the state-run behemoth.
Instead, the new government intends to streamline the functioning of Coal India to ensure uninterrupted electricity supply across the country, he added.
India has the world's fifth-largest reserves of coal and is the cheapest fuel, which is also used to generate more than half of India's electricity. However, delays in environmental approvals, land acquisition problems and inefficient systems have resulted in the country ending up as the third-biggest importer of coal.
CIL missed its output target of 482 million tonnes by producing 462 million tonnes of coal in 2013-14.
CIL has seven subsidiaries, including 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, established in 1975 as a state-owned entity, has current market capitalisation of Rs2,41,379.87 crore. In 2010, it sold 10 per cent of its shares in the nation's largest initial public offering.
CIL has so far signed fuel supply pacts with power plants for a capacity of only 73,075 MW. The coal and power ministries are now under one minister - Piyush Goyal.
A year after that the government issued Presidential directive to CIL for signing the pacts for a capacity of 78,000 MW capacity, CIL has so far signed fuel supply agreements (FSAs) for a capacity of 73,075 MW, according to a document issued by the coal ministry on 25 June.
Fuel supply pacts for the remaining 4925 MW could not be signed till date due to issues, including "extension of coal supplies beyond the period admissible under tapering linkage policy", the ministry said.
Besides the issues pertaining to the signing of fuel supply, Coal India and country's largest power producer NTPC have been at loggerheads over the quality of coal being supplied to power plants and grade slippages.