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Wednesday, January 25, 2012

Privatise Coal India to improve production, suggests Ficci

Wed, 25 Jan, 2012,

NEW DELHI: Industry body Ficci has suggested privatisation of CIL to improve coal production at a time when power plants are facing an acute fuel shortage.

"Either you privatise or break it up (Coal India) into several independent units, not keep it centralised... You have to do something drastic," Ficci's new President Rajya Vardhan Kanoria said.

His comments come at a time when most power projects are grappling with a severe coal shortage, mainly on account of lower domestic production.

"... I think that why don't they (government) strategically divest Coal India to make it private. It will serve two purposes: one is that it will make sure revenue for the government and second, (change in) culture. The culture has to change," Kanoria said.

"The coal problem is becoming serious. One is pricing and the other is availability," he noted.

Even though fuel linkages have been assured for many projects, Coal India has been unable to meet demand. As a result, entities are importing coal at higher prices from overseas.

"The government is lacking in their approach in the coal sector. Some serious decisions have to be taken (with regard to coal issue)... There is coal. India has one of the largest reserves," he said.

State-run Coal India had missed its April-September production target of 196 MT, recording an output of just 176 MT. The entity had blamed adverse weather, including heavy rains in August-September, for the fall in production.

The PSU missed its revised production target last fiscal as well, recording an output of just 431 MT against the commitment of 460.5 MT.

As per the Central Electricity Authority (CEA), as many as 40 thermal power stations had coal stocks for less than seven days as of January 23.

Last week, the head honchos of private power producers met Prime Minister Manmohan Singh to apprise him of various problems faced by the sector, including fuel shortages.

(sourced ET)

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