Coal ministry, CIL sign MoU on 2011 targets

Written by fe Bureaus | Kolkata | Updated: Mar 31 2010, 05:14am hrs
Coal India Limited (CIL) has signed a memorandum of understanding (MoU) with the coal ministry on Tuesday to settle its performance obligation for 2010-2011.

After signing the MoU, CIL chairman Partha S Bhattacharyya said the performance obligation mainly consisted of financial and nonfinancial performances and that both would carry a weight of 50% each.

A CIL official said the key parameters were gross margin, gross sales, financial ratios, quality of coal, coal production, off-take, productivity, customer satisfaction, human resource development, safety and environmental management.

C Balakrishnan, coal secretary, and Bhattacharyya signed the MoU in Delhi on Tuesday.

Bhattacharyya said as agreed in the MoU, CILs targeted production in 2010-2011 has been pegged at 461.5 million tonne against 435 mt in 2009-2010, while coal off-take for 2010-2011 has been pegged at 462.5 mt.

In fact, CIL had to keep a higher offtake target because it already has a huge stockpile due to non-availability of railway rakes, which has already impacted production in 2009-2010.

According to a CIL official, CILs stockpile as on date is 62 mt with Mahanadi Coalfields, Bharat Coking Coal and Central Coalfields holding 76% of the total stock. CIL ended 2008-2009 with a stockpile of 47.18 mt and is likely to end 2009-2010 with a stock of 63-64 mt.

Although the offtake target has been fixed at just 1 mt more then the production target, to achieve this target (462.5 mt) offtake has to go up by around 43-44 mt in 2010-2011 against the targeted 27-28 mt in 2009-2010. However, offtake growth was only 15 mt against a requirement of 27-28 mt in 2009-2010 and this contributed to the increase in stock, the official said.

Bhattacharyya said CILs requirement of rakes has been 185 a day and the railways supply was an average of 155 rakes a day. To attain the targeted offtake we have sought 185 rakes a day for 2010-2011 which will reduce our stock but not clear it. But if the railways fails to provide us with the required number of rakes then CIL will be forced to produce less than the target set in the MoU," Bhattacharyya said.

In fact, CIL would have to end 2009-2010 by producing less than its target 430-432 mt against 435 mt. CIL, according to the official, is also interested to invest in railways for assured supplies of rakes. The MoU has also laid emphasis on R&D and corporate social responsibility. While allocation for R&D has been increased from Rs 15 crore to Rs 30 crore in 2010-2011, it has stepped up its budget on CSR to 5% of the retained earnings of 2009-2010 or a minimum of Rs 5 a tonne of coal produced. in 2009-2010 against an earlier earmarking of Rs 1 per tonne of coal produced.