CIL set to miss FY14 output target by 7 mt

Written by fe Bureau | New Delhi | Updated: Dec 13 2013, 07:47am hrs
Delays in getting clearances from the environment ministry will impact Coal Indias production schedule again this year, with the company set to miss its 2013-14 production target of 482 million tonne (mt) by a margin of over 7 million tonne. But this will not impact CILs consumers as the company will manage to meet its offtake target of 493 mt for current fiscal using the 33 mt coal stock.

The fall in production this year would be about 5% of the targeted level, the highest seen in the last four years. In 2012-13, production was about 3.9% short of the targeted level.

About 20 million tonne of our production from a few mines is stuck for want of green clearances. Though the coal ministry has assured that the issues would be addressed on a fast-track basis, production for this year may reach just about 475 mt, CIL chairman and managing director S Narsing Rao said.

Coal India has missed its production targets previously as well. In 2012-13, the company missed its output target by 3%, reaching an output of 452.4 mt against the targeted 464 mt.

On production of 475 mt this year, the growth in production would be a mere 5%, much below the company's expectations. Even in 2011-12, production grew marginally to 436 mt (target 448 mt and 452 mt). In 2010-11, production stood at 431.32 million tonne, almost the same as last fiscal.

This week, the coal ministry held several rounds of talks with different departments, including those at the ministry of environment and forests, to help Coal India get clearances.

CIL's performance is also being monitored by the Prime Minister's Office (PMO) as coal output is critical for meeting the fuel requirements of the growing power sector. The company has to supply close to 200 mt of additional coal in coming years to meet the fuel needs of over 78,000 MW of power capacity coming up by March 2015.

CILs production shortage is a matter of concern as it could result in further slippages in coming years. The miner needs to mine 530 million tonne next year, which would go upto 615 million tonne in 2017-18.

To a question on the abuse of monopolistic position by CIL, as mentioned in the recent CCI order, Rao said that while he has full respect for the order, the monopolistic position of the company should be seen in the light of huge dues of R12,000 crore that various utilities owe the company. While NTPC owes cil R3,200 crore, DVC owes about R1,000 crore and West Bengal Electricity Board about R1,300 crore.

CIL plans to challenge the CCI verdict in the appellate tribunal. CCI in its verdict a couple of days ago slapped a penalty of R1,773 crore on CIL for allegedly abusing dominant position in supply of the dry fuel its first major penalty on a state-owned company. It is a question of principle. We still think we are not at fault, Rao said, indicating that the company has already taken several measures in FSAs that should address the concerns of consumers.