Coal India to be run by professional CEO from pvt sector?

On the advise of coal ministry, Public Sector Enterprise Board (PESB), the head hunter for PSU executives, has invited professionals from the private sector along with those from government owned companies to apply for the for the post of chairman and managing director (CMD) of Coal India.

The post of CMD of Coal India is empty since May-end when S. Narsing Rao resigned. A K Dubey, additional secretary in Ministry of Coal, is officiating the post till a full-time chief executive is appointed. Appointment of CMD of Coal India has become important in wake of the recent Supreme Court order that cancelled almost the entire captive coal block allocations. Most of these blocks may now come to CIL to maintain their operations. Besides, CIL also has to take quick decisions to operationalise its own mines to meet growing demand. Absence of a full time CMD is hurting its decision making process.

PESB last week invited application from suitable candidates for CMD position in CIL. Unlike in past, the PESB advertiment this year has extended eligibility of application for private sector executives as well.

In the advertisement, PESB has invited applications from private sector executives from both listed and unlisted companies with a turnover of Rs 5,000 crore. Application has been invited til October 29 and candidates have also been asked to give in detail their work experience and responsibilities handled.

“Private Sector Executives must be working as whole time Director/President/CEO in a listed company whose average annual turnover during the last three financial years (2011-12, 2012-13 and 2013-14) was at least Rs 5000 crores,” it said.

For executives from unlisted companies, PESB added a clause that the average annual turnover of the Group to which it blocks should be at least Rs 10,000 crore and the holding company or at least one of the subsidiaries of the Group should be listed on a Stock Exchange.

Coal, power and renewable energy minister Piyush Goyal is keen to professionalise operations of PSUS under administrative control of his ministry. The plan for CIL, may also be replicated in other companies such as DVC, PFC, NHPC etc who are also awaiting full time appointments of their respective chiefs.

Goyal has said recently that private sector executives may not be offered the salaries they may be drawing outside, but if they have with to turnaround the fortunes of an entity, they would be given free hand to do so.

Earlier, the PMO gave its nod to consider private sector executives as well for PSUS. But it needs to be seen how this exercise is taken by strong workers union at CIL. With a workforce of over 3.5 lakhs, CIL is one of country’s largest organisations.

Government on its part is also just exploring the radical initiative and has therefore not allowed this flexibility in appointments of CMDs in Powergrid Corporation and Neyveli Lignite Corporation.