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For years, the Centre has been pushing Coal India to achieve higher growth in production. As a result, coal piled up at the pit head even when production remained flat. Despatches or sales in the market place were neglected.
The scenario is now set to change. In a major organisation revamp initiative, the CIL proposed the Government to focus on despatches as the sole performance parameter of the company and its managers.
“If the Government approves, we will change the reporting norm to despatches. The target for 2013-14 will be set at selling 487 million tonnes of coal,” a source told Business Line .
CIL sold 433 mt of coal in 2011-12 and is expecting to end this fiscal with a final offtake of 470 mt.
Consumers’ Gain
From the perspective of the organisation, the switchover will not be easy. Over the years, the company’s managers blamed railways for low offtake and earned laurels for achieving production targets.
The result was catastrophic. In 2009-19, CIL added 28 mt, half of which were simply added to the inventory. Offtake grew by a mere 3.5 per cent against seven per cent growth in production.
Between 2010-11 and 2011-12 when production grew by a mere four mt, pit-head stocks went up by seven mt to about 71 mt.
Considering the properties of coal, much of this stock may have already ended up in flames or deteriorated in quality.
CIL lost opportunity to realise nearly Rs 8,400 crore of cash. Government lost opportunity to collect over Rs 2,000 crore of taxes and duties.
Clearly, the over emphasis on production has not helped the country as consumers resorted to costly imports, while coal was rotting at pit-head.
Mines were opened in areas which are not connected by railways.
If the flood of complaints at the Vigilance Department and the cases pending with law enforcing agencies are any indication, inflating production figures is a problem in CIL.
According to sources, the proposed changes in reporting norms will target this root cause of corruption, while making its managers more accountable to their consumers.
“Let us set the trigger on despatches, production will follow,” a company source said.
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