Singareni Collieries CMD S Narsing Rao is the first IAS officer who will be taking over as the chairman and managing director of Coal India (CIL). The Public Sector Enterprises Board has named Rao as the next CIL CMD in place of Zohra Chatterji, ministry of coal additional secretary, who is holding the additional charge of the CIL chairman after NC Jha’s retirement. FE’s Indronil Roychowdhury speaks to Rao on his plans to steer the company. Excerpts:
What will be your priorities as the chairman and managing director of CIL?
My top priority as the new CIL CMD should no doubt be stepping up production and dispatch. CIL has produced 435 million tonne (mt) in 2011-12. This is 85 mt short of the target as the plan was to produce 520 mt at the terminal year of the 11th Plan period. Now, along with stepping up output, we will need to assure increasing dispatches because coal firms should not allow pit head stocks to grow. If the railways can supply us enough rakes, increasing dispatch shouldn’t be a problem as there is a huge demand from the power sector. Around 20,000 MW of power capacity is ready but can’t be commissioned for lack of coal. I think the real demand-supply gap is 100 mt and we will have to bridge it. But the challenge is greater because on one hand we will have to bridge this 100-mt gap and on the other we will have to meet the further demand increase in the next five years.
How far it is feasible for CIL alone to meet the increasing requirement of coal for the power sector?
It is not fair to put the entire responsibility on CIL alone. There is already 90% trigger level for the existing power projects and talks are on for 80% trigger level for new projects. The trigger level is a matter of concern. Supplying coal doesn’t only depend on production; a lot depends on dispatches too. Railways plays a very important role in ensuring proper supplies. If such trigger level has to be maintained then railways will have to dispatch 300 mt a year. Railways also faces problems of inadequate tracks and rakes to transport such huge quantities. But both the railways and CIL have plans to work together to address these issues. Environment and forest clearances, land acquisitions and other issues also affect production. It needs a lot of coordination to have things in place. So everyone will need to take responsibilities.
What do you think about CIL’s existing human resource?
Both human and machine productivity have to go up. Let me not talk about management now but there is enough room for increasing efficiency for people on the field. Mass production has to come up through enhanced and efficient use of heavy earth moving machines and we will have to focus more on technology to get more coal from the underground.
Should CIL’s huge cash reserve be utilised in improving operational efficiency?
It is always an advantage to have cash reserves and CIL’s whopping reserve of R64,000 crore is an added advantage to the company. But money alone doesn’t help. There are procedural issues, executing issues and project monitoring issues related to operational efficiency. Everything has to be set on the right track to ensure efficiency.
There are lots of debates on coal pricing and specially on the Gross Calorific Value (GCV)-based pricing? What is your take on it?
This issue has to be seen more closely and I should comment after taking charge. But GCV-based pricing has created scope for coal companies to realise better prices while asking for improvement in quality of supplies. For consumers paying the right price for the right kind of coal is value for money. GCV-based pricing has created this opportunity since band width of calorific value has been narrowed down. But there are concerns relating to quality and joint sampling that will have to be closely looked at.
CIL will also have to look into shareholders’ interest, while looking at the national interest. How do plan to strike a balance between the two?
The key to this lies in increasing coal production. The country needs coal and shareholders need healthy financial performance. CIL doesn’t need to compromise with lower production for financial growth. Higher production can earn higher profits for CIL.
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