Coal India hints at price increaseFebruary 3rd, 2009 - 8:41 pm ICT by IANS
Kolkata, Feb 3 (IANS) Coal India chairman Partha Sarathi Bhattacharyya Tuesday hinted at hiking coal prices, but said any such decision would be taken after ensuring that end-users remained globally competitive.With the company incurring a burden of Rs.52 billion (Rs.5,200 crore) for paying arrears since July 2006 - when the recently-signed eighth national wage settlement for Coal India employees came into retrospective effect - and for making provisions for the enhanced gratuity bill.
“But before any price adjustment, we have to basically see the impact of these decisions. We will also have to consider how to keep end-users in the country globally competitive. On the other hand, the viability of our projects also has to be ensured,” Bhattacharyya said.
“We will first try to increase our production and productivity. And then decide,” he added.
Asked whether it would be possible to offset the burden without any price increase, the CIL chairman said: “Perhaps not.”
Company sources, however, said any such price increase would only be considered in the 2009-10 fiscal at the earliest.
As per the five-year wage agreement, the 445,000 coal workers in the country will get at least 24 percent more than their earlier wages.
The company’s wage bill per annum will increase Rs.18 billion (Rs.1,800 crore) on account of the agreement. “We are likely to incur a burden of Rs.400 to Rs.500 crore annually once the salaries of the officers are also revised.”
Bhattacharyya said coal production has grown by 7.1 percent for the first eight months of fiscal 2008-09. In absolute terms, production increased by 21.08 million tonnes to 316.45 million tonnes during the period as against 295.37 million tonnes in the corresponding period in 2007-08.
Among the various CIL subsidiaries, South Eastern Coalfields topped with a growth of 6.85 million tonnes, followed by Mahanadi Coalfields and Northern Coalfields at 4.15 million tonnes and 3.57 million tonnes respectively.
CIL was expecting the production to go up to 435 million tonnes in 2009-10 from the 2008-09 target of 405 million tonnes.
Bhattacharyya said through the special purpose vehicle, International Coal Ventures - formed by the company with leading state-owned companies SAIL, Rashtriya Ispat Nigam, NMDC and NTPC - was scouting for coal property in Mozambique, Canada, Indonesia, Australia and the US and hoped to achieve a breakthrough in 2009-10.