Book review: When Coal Turned Gold: The Making of a Maharatna Company by Partha Sarathi Bhattacharyya

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Published: November 25, 2018 3:14:48 AM

An inside account of running a public company and its challenges

The book comes out at a time when political grip on PSUs is becoming tighter.

Former president Pranab Mukherjee notes in the foreword of the book, “It is very difficult to tell corporate stories, especially if there aren’t any elements of deceit, drama and espionage attached to them.” Partha Sarathi Bhattacharyya, former chairman and managing director of Coal India Limited (CIL), nevertheless, took up the task—quite rare among people in such positions—to chart the transformation of the world’s largest coal miner from a loss-making company to a profitable Maharatna public sector undertaking (PSUs).

It is not that the transition lacked the “elements of deceit, drama and espionage” at all. Perhaps their presence was ominously concealed in the drab pages of balance sheets and bidding documents, making it more difficult to identify, encounter and negotiate. Though not conforming to the popular perception of thrillers, these impediments, nevertheless, had to be tackled competently with the grit and sly of a spy, but, of course, sans the glitz and glamour. At stake were lives and livelihoods of millions.

The watershed moment of the transition was CIL floating its initial public offering (IPO) in 2010. The book When Coal Turned Gold threads the lessons learnt from all the events that culminated into the IPO. It portrays the picture from the lens of a person who was a part of the journey throughout, and finally at the helm of affairs.

The IPO, inaugurated on November 4, 2010, had fetched an aggregate subscription of Rs 2.33 lakh crore on its fourth day, oversubscribed a little over 15 times. It was among the top three global IPOs held that year, going a long way in changing the perception on disinvestment of PSUs. Though the promise of reforms in PSUs post-disinvestments have not been satisfactorily met till date, the spillover of the CIL IPO was palpable with the subsequent listings of other smaller state-owned companies becoming successful, contrary to expectations.

The book talks about the steps taken by CIL to revamp its reputation before the IPO, allaying global investors’ apprehensions on misuse of land, lack of restoration, reclamation and mining issues. It elucidates how the range of initiatives, starting with dealing with bankers in boardrooms, labour unions and politicians on murky mines to organising international roadshows, were taken up by the company to change perceptions.

Before taking up the reins of CIL, Bhattacharyya was at the helm of affairs at Bharat Coking Coal (BCCL), whose headquarters are based in Dhanbad. The notoriety in the area revolving around coal has been graphically represented in Anurag Kashyap’s magnum opus Gangs of Wasseypur, where there was also a tertiary reference to the tribulations faced by state-owned coal company officials, with one of them getting killed by the mafia in his own bungalow in Dhanbad. In such circumstances, it was indeed brave of Bhattacharya to start living in the designated CMD bungalow in Dhanbad, against all advice. The place had been uninhabited for quite some time as his predecessors preferred to live in another bungalow within the residential BCCL complex in Koylanagar.

Bhattacharya’s description of his stint as BCCL boss shows he was not completely unaware about the importance of perception—a quality which later helped CIL in image-building before the IPO. From an example cited in the book, he invited journalists to the BCCL mines, enduring underground fire to let the public know how crucial it was to outsource coal production to private contractors in such places for the benefit of the financially ailing company that was the fulcrum of the local economy. This helped in changing the popular perception on outsourcing, reversing the resistance put up by labour unions and political forces. After faring poorly in the state assembly elections in 2005, the local MP realised that his party was deprived of the votes of BCCL employees since it had blocked the scope of prosperity by denouncing outsourcing.

Though the writer talks about how he made the strategic move towards outsourcing coal production, he doesn’t dwell much on how the benchmarks set for mine developer and operator (MDOs—a ramification of contractor-based production) got subsequently diluted. Industry experts have often pointed out that equipment such as mechanised shovels, shredders and trucks used by MDOs are not in line with stipulated benchmarks. The very idea of nationalising the coal industry in 1973 was to bring about an end to ‘slaughter mining’—unsafe practices and lack of investment in suitable technology.

Apart from the IPO journey, the book also reflects various governance lapses, policy lacuna and the extraordinary effort warranted to run a PSU efficiently amid the cobweb of red tapism. It shows how CMDs have to spend time and effort to take up petty issues such as procuring tyres for dumpers right up to the central vigilance commission (CVC) for approval. An anecdote of a quotidian subject like the cancellation of a high-priced bid being taken up to as high as the committee of secretaries annotates the point further.

The book comes out at a time when political grip on PSUs is becoming tighter. The government now has more say in production targets instead of the companies. Low-production companies like BCCL are putting forward over-ambitious annual targets like 100 MT. Industry insiders have claimed that such targets, impractical by any parameters, are more focused on being in the good books of the ministries rather than bringing real reforms.

The intricate dynamics between managing such an organisation and the larger political system automatically constitutes content that would make it intriguing to minds interested in such areas. It might also help one deduce why it is difficult for state-run companies handling precious national natural resources to run as autonomously as their global counterparts.

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