Companies & Sectors
Focus areas for new CMD at Coal India

Though India produces more than 520 mt of coal a year, underground mining is said to contribute only 36-40 million tonnes.  This is an area that needs to be explored further

 

Press reports confirm that a section of Coal India Limited (CIL) and Singareni Collieries workers may go on a strike, with effect from 7 January 2015. This is in spite of government entreaties to the trade union leaders to avert the agitation and to discuss the issues on hand. Five trade unions, including INTUC and AITUC have given the strike call to press their demands, which includes a rollback of the denationalisation process of the coal sector and stopping the divestment and restructuring of Coal India. To safeguard the interest of power generators, Coal India has stepped up its supplies, just in case the strike goes on schedule.

 

It is at this important juncture, Suthirth Bhattacharya, an IAS officer who was CMD of Singareni Collieries Co Ltd, has just taken over as the new Chairman and Managing Director of Coal India Ltd, as of Monday, 5th January. He has a heavy work schedule on hand, since CIL was a headless organisation since S Narasing Rao left to be in Telengana.

 

His first priority is to pacify the striking leaders and persuade them to call off the agitation, and sit for discussions.

 

It has already been reported in the press that Suthirth Bhattacharya will do all he can to ramp up coal production and to increase supplies to all customers of Coal India. Apart from persuading the strikers to call of the agitation, his priorities include three major railway lines in Jharkhand, Odisha and Chhattisgarh so as to unlock huge coal reserves in these states and make them available to consumers.

 

Bhattacharya had taken over as CMD of Singareni Collieries in 2012, prior to which he was Principal Secretary (Energy) for the Government of Andhra Pradesh (undivided).

 

During his tenure, Singareni produced 10.54 million tonnes (MT) of coal from underground mining and 39.92 MT from open cast mines. During this period, work on 1200 MW thermal power project at Jaipur in Adilabad district of Telengana progressed well and is expected to be commissioned by September this year. The Adiriyala coal mining project also got off to a reasonable start of 5,000 tonnes per day and is expected to reach 3.2 MT when in full production.

 

His experience in underground mining would be of immense use in handling 300 small coal mines that employ around 3,00,000 miners.

 

Globally, underground mining plays a vital role in coal supplies and accounts for about 20% of the total production. Though India produces more than 520 MT a year, underground mining is said to contribute only 36-40 MT. This is an area that needs to be further investigated by Suthirth Bhattacharya, considering large reserves of coal in Chhattisgarh, Jharkhand and MP. These have a forest cover and therefore needs to be extracted with great care, without destroying the forests. Coal seams are found generally about 300 metres from the surface.

 

Instead of engaging in the easier technique of open cast mines, with a little effort and state of the art mining equipment, it should be possible to extract coal from underground mines without disturbing the forest cover.

 

It is therefore gratifying to note that the Ministry of Environment and Forests (MoEF) has now entrusted the task of preparing a National Forest Policy (NFP) to the Indian Institute of Forest Management (IIFM, Bhopal), to bring out a framework of policy by end of March 2015. The earlier policy reports were brought out in 1952 and 1988, and it is hoped that the new version would take into account the changing circumstances in the country.

 

It may be recalled that, prior to the formation of the new government, a lot of issues of clearances acted as stumbling blocks and the MoEF was at the receiving end of endless complaints by all concerned. PM Modi had promised that his government would do all it can to ease green clearance norms so as to avoid the diversion of land for non-forestry purposes, such a mining, and at the same time make project developments possible.

 

India has 22% forest cover. It is believed that mining activity can still take place effectively without disturbing it and underground mining, such as in the worldwide coal industry, would be a good start, as this can be done without destroying forests.

 

Suthirth Bhattacharya may be able to depend on his Singareni experience and focus in this area, besides expeditiously handling railway lines from point of production to areas of need. It would be worthwhile for him to device ways and means to set up a coal express that is able to move coal when railway tracks are not heavily used. Closer cooperation with railway ministry would be one other sector that he needs to concentrate on, so that coal movement is not derailed.

 

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)

User

Coal miners begin 5-day strike today

Unions including BJP-backed Bharatiya Mazdoor Sangh have joined together to go on strike for 5 days, affecting coal supply in many parts of India

 

7 lakh coal industry workers today joined together to go on a nationwide strike. In the biggest union action since 1977, this strike is being supported by all the major trade unions in the country, including the BJP-backed Bharatiya Mazdoor Sangh (BMS), Indian National Trade Union Congress (INTUC), All India Trade Union Congress (AITUC) and Centre of Indian Trade Unions (CITU) among others.
 
The strike has been called with a demand to roll back the process of denationalising the coal sector and to protest the proposed re-structuring and disinvestment of Coal India Limited.
 
India has had many coal supply shortages in the recent past, but the power sector has managed to scrape through. This strike will affect coal production of upto 1.5 million tonnes per day and is expected to hit power producers and cause blackouts.
 
Newly appointed Coal India Limited CMD Sutirtha Bhattacharya was quoted by PTI News as saying, "We are hopeful the situation would be resolved in an amicable manner. The precise impact of the strike would be known later and it would be premature to predict (the impact) at this juncture."
 
Power minister Piyush Goel is expected to meet union representatives to address their demands tomorrow. This meeting gains significance because as per reports, coal supply to the North and East of India are already stretched and being cash-strapped, these utilities would not be able to buy power, possibly causing wide-scale blackouts.

User

Gyan Sangam: A well thought out plan but requires follow up action

Prime Minister Modi attended a retreat with India's top public sector bankers, we take a look at what came out of the two day event

 

Speaking at the bankers’ meet christened ‘Gyan Sangam’ at the National Institute of Bank Management at Pune on Saturday, Prime Minister Narendra Modi conveyed a his expectations from the banking sector. However, concrete steps to achieve the objectives put forth at the conclave are yet to be spelt out by the Government. 
 
The Prime Minister (PM) said that the banking sector of a country mirrors its economic rise. Japan and China had banks in the top ten banks of the world during their economic rise. He therefore called upon the banking fraternity to establish banks here which rank among the top banks in the world. 
 
Only one Indian bank figures among the 50 biggest banks of the world. SBI is ranked at 38, ICICI Bank is 99 and HDFC Bank 126, the second biggest among public sector banks (PSB) is Punjab National Bank, ranked at 189, followed by Bank of Baroda at 206. 
 
There were signs that a decision to merge some of the weak public sector banks with strong ones would be taken at the meeting. The Financial Services Secretary Sri Hasmuch Adhia said after the meeting, that each bank’s board would decide on consolidation and if it was commercially viable, the Government would respect such a decision. This means consolidation of banks appears to have been put on the back burner for the present.
 
The most important statement made by the PM was that banks would be run professionally and there would be no interference. He even said that the Govt. had no vested interest and that PSBs can derive strength from this fact. He made a distinction between interference and intervention. He said he was against political interference, but supports political intervention in the interest of the people. Political intervention would enable the voice of the common man to reach such institutions to ensure accountability, which was essential he said. Let us hope all this is put into practice by the political class and thus provide the banks with autonomy to function without any fear or favour. 
 
The PM also asked banks to develop dedicated teams to fight cybercrime. Though he did not elaborate on this subject, this is an area that calls for concerted action from all banks to ensure that customers of banks do not suffer for no fault of theirs. There is a need for the RBI to issue guidelines to limit the liability of banks’ customers in all internet frauds, which alone will create more confidence among the public to use technology in their day to day operations with banks. 
 
Without specifying how to improve the performance of banks, the PM said that with 81% of branches and 77% of deposits, the net profits of PSBs should improve from current levels of 45%. PSBs however have been reeling under the burden of bourgeoning non-performing assets that have affected their profitability to a considerable extent. In fact, Moneylife Foundation has already submitted a memorandum last month to the Prime Minister giving suggestions on how to improve the functioning of public sector banks.
 
 
Unfortunately, neither the Govt. nor the RBI had any immediate solutions to fight the menace of large value NPAs, except to say that big defaulters need to be booked quickly.
 
There is a need to provide a systemic cure to ensure that such large defaulters do not take banks for a ride by legally empowering the banks to remove the willful defaulters/ promoters from management of such companies, which alone can help the banks to quickly come to grips with recalcitrant borrowers. 
 
The PM in all earnestness exhorted the PSBs to be conscious of the directions in which the country is moving and work towards simplifying procedures to facilitate the common man. He also called upon banks to trust the common man. He asked the banks to take the lead in skill development for youth in a big way and to prioritize loans to students as this would be a very productive investment for the country. The Prime Minister called for an end to lazy banking and asked banks to take a proactive role in helping the common man.
 
However, the subject of improving the customer service and creating robust customer protection guidelines was conspicuous by its absence. Even the threat of bank employees going on an indefinite strike in the coming days, demanding wage settlement, did not appear to bother the powers that be. Let us hope that these sombre words of sympathy for the common man will be followed up by concrete action. 
 
Another important issue that the PM highlighted was the poor financial literacy in the country and called upon the banks to encourage competitions in schools on financial literacy, so that financial literacy is inculcated at an early age among the children as well. 
 
(The author is a banking analyst, writing for Moneylife under the pen-name ‘Gurpur’)
 

User

COMMENTS

B. Yerram Raju

2 years ago

Private Banks have behaved no better and this has been proved when recession gripped the financial sector in 2008. US, UK and elsewhere, governments resorted to nationalisation of financial assets. If the public sector is not interfered with they have a good chance to perform as the trust can be leveraged for sound business and converting risk into business opportunity.
More importantly today, which Gyan Sangam did not choose to discuss is the machine taking over man in the financial sector. KYC is nothing but compliance with a set of documents to be kept on record. The Bank officers do not understand the customer or his needs. They today have become slaves of the computer. Every employee acts in absolute obedience to the instructions of the system because he has neither time nor interest in responding to the need of the customer/client.
Marketing officer markets the credit; System apprises the application and throws up the limit for sanction; laid down discretionary powers apply the sanction; the field officer/branch manager goes to the units to remind the due dates of installments; in desperate cases, they put up proposals to auction of assets under the SARFAESI Act. In regard to corporate entities, the proposals are discussed in cozy chambers; anticipated project returns as proposed by efficient chartered accounts are endorsed and the proposals go to the Boards for sanction. The boards have little time to go through the nitty gritty of things and they approve. When the monitoring reports are placed again before the Board, they hardly have time to scrutinise and raise relevant questions. The result is they get into the NPA group. When the NPA statement also reaches the Board, the one-day or half-day Board has little time to go into details of the voluminous papers before them and they fail to monitor them. When the NPAs touch the roof, everybody sheds crocadile tears as if the bank is a victim of circumstances in generating them.
Humanising banking is the need of the hour. The reforms should focus their attention here.

R.Asokkumar

2 years ago

Politics is always practice of tokenism. Even if two or three big deliberate defaulters are put behind bar or divested of control in their companies, you will see significant improvement in the NPA situation in PSBs.
-R. Asokkumar

Rajendra M Ganatra

2 years ago

Public sector banks (PSBs) are bust due to management moral hazard since the management exercises no control on the operations. Government interference though real, is more of an alibi. It is unlikely that a super board at the holding company level would fix the internal hemorrhage.

Today the young HDFC bank has higher market cap than the behemoth SBI. It is inconceivable that only the government interference is responsible for this.

Any entity to be efficient has to be controlled and run by people with stake in the entity. This is possible only with private sector, and privalisation of the banks is the only way forward keeping with the maxim that the government has no business to be in business.

Let the government operate special purpose institutions such as SIDBI and NABARD to meet the developmental needs. Let the commercial banks be in private sector domain.

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)