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Face 2 Face

The Vajpayee government, which is actively considering joint ventures in coal mining including foreign investment, is in no hurry to restructure the public sector giant Coal India Ltd. (CIL), either in the form of turning the subsidiaries into separate companies or assigning the massive task to discontinue with the subsidiary concept altogether. In an interview with the tendertimes.com, Union Minister of State for Coal, N.T. Shanmugam said that the fate of the ailing Eastern Coalfields and Central Coalfields would be decided only after getting the report of the expert committee and the revival proposals from the concerned subsidiaries.

The Minister of State for Coal Mr. N T Shanmugam was in Calcutta recently for a day to attend a meeting of the scientists, geologists and technocrats. He spoke to Chandra Sekhar Bhattacharjee of tendertimes.com on some of the burning issues.

Q : The government has in principle decided to invite private sector as its joint venture partner in coal mining but in what form it is likely to shape up?

MoS (Coal): Yes. The government is quite serious about the proposal. In fact, not only Indian private sector,even the foreign investors would also be allowed to take part in the joint ventures, if they like.

Q :  What really prompted the government to go in for joint ventures when as such captive mining by private sector is allowed ?
 
MoS (Coal): The government apprehends a demand-supply gap in the next five-year plan. To bridge this gap and to have a comfortable stock position so that the country does not face any shortage , the joint ventures are being contemplated. But at the moment the entire issue is lying with the Standing Committee. After its vetting, the proposal has to be Okayed by the Parliament.

Q :  Will the existing mining programmes of various subsidiaries of Coal India Ltd. be brought under the joint venture schemes?

MoS (Coal): No. The CIL subsidiaries would not be asked to hand over their existing mining areas to the JV partners. New coal blocs would be earmarked for JVs.

Q :  There is mounting pressure on the government to dismantle the holding company, Coal India limited. What is the stand of the ministry on this crucial issue?

MoS (Coal): Yes. There are demands from various quarters for dismantling CIL, the holding company. But, this is a very important issue and the government cannot take any decision in haste because such a decision has many ramifications. There is no denying the fact that the holding company does not produce coal but is being funded by the earnings of the CIL subsidiaries. But, as a nodal agency the holding company does contribute a lot for the subsidiaries. The government has three options before it which has to be deeply looked into before taking any decision:(1) to keep the structure in its present form; or (2) to dismantle and turn all the subsidiaries into separate companies; or ( 3) to keep CIL as it is and dismantle all the subsidiaries.
But before taking any decision pertaining to such a sensitive issue as dismantling of the existing structure of CIL the government would have to look into various economic implications of such an action. The government cannot act just because some people have demanded it.

Q :  The government seems to be quite concerned particularly about twoof the CIL subsidiaries, namely Eastern Coalfields and Central Coalfields. What is the present thinking of the government about these two ailing subsidiaries?

MoS (Coal): An expert committee is looking into the matter and the government would take a stand on these two subsidiaries only after getting the expert committee reports. However, the management of these two subsidiaries and CIL have been asked to submit revival plans of ECL and CCL within six months. Two months have elapsed since then. Four more months are left to them. The views of the management of these two subsidiaries would be also be viewed seriously.