Although ECL sources declined to comment on the issue, insiders fear that the company has already been bogged down by heavy losses and is likely to be referred to BIFR in the next fiscal.

ECL posted Rs 547 crore losses in 1997-98. The figures for 1994-95 and 1995-96 were even higher at Rs 655.21 crore and Rs 779.49 crore respectively. ECL is the first Indian corporate to suffer such a huge loss in a single year. Till August 1998, it had already incurred losses of around Rs 300 crore.

The company has set itself a coal production target of 32 million tonnes for 1998-99, although it is believed that it will have to produce four to five million tonnes more to break even. According to coal industrysources, it is practically impossible for ECL to achieve the target with the current production position. Even if it gets full support from all the trade unions and achieves the 1998-99 target, it will incur losses to the tune of Rs 300 to 400 crore, they said.

The ECL management, which was not getting the desired support from the Centre of Indian Trade Unions, is optimistic after chief minister Jyoti Basu's recent criticism of the activities of trade unions. Basu had said that the indifferent attitude of trade unions in the Asansol-Durgapur industrial belt has caused the sickness and even closure of big industrial units. "Basu's attitude would surely help us," a senior ECL official said.

Industry sources said they expect the state government to frame a code of conduct for trade unions which would help companies in West Bengal, including ECL.

Consumers said the coal produced by ECL is so expensive that it is cheaper to either import or obtain it from other CIL subsidiaries.

According to coal ministrysources, at the last meeting of the standing linkage committee on coal held on September 11, representatives of the Uttar Pradesh State Electricity Board, Punjab State Electricity Board, Harduaganj Power Co, several power houses of Damodar Valley Corporation and the West Bengal State Electricity Board declined to sign coal linkage agreements with ECL. They preferred to opt for other sources as ECL coal is costlier.

Cement companies like Gujarat Ambuja Cement, Tamilnadu Cement Company and ACC have already deserted ECL.

The West Bengal government charges a coal cess of around Rs 500 per tonne compared with Rs 135 royalty charged by the Bihar government. As a result, each tonne of A grade ECL coal becomes dearer by Rs 480, grade B by Rs 422, grade C by Rs 370 and grade D by Rs 309 compared to those obtained from Bihar.