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Govt invite bids for advisors for CIL restructuring process

08 Jan 2013 Evaluate

The government has invited bids for the appointment of advisors to restructure the nation’s largest coal producer, Coal India (CIL). The 12th Five Year Plan document recommended setting up of a high-level committee with the task of examining the option and to submit a report within six months.

The development comes close on heels of the Coal Ministry informing the Prime Minister’s Office of the appointment of consultants with international expertise and frame timeline to take forward the proposal on restructuring of the state-owned miner. “The industry would be better served if the subsidiaries were spun off as separate public sector companies, encouraged to develop their own strategies of coal development including joint venture activities and acquisition of assets abroad,” as per the 12th Five Year (2012-17) Plan document.

The Planning Commission and many high-level panels, including Expert Committee on road map for coal sector reforms, also known as T L Shankar Committee, recommended the restructuring of CIL keeping in view the rapidly increasing demand of coal and the need for enhancing coal production and to make the sector competitive. Earlier, the Planning Commission had suggested spinning off CIL subsidiaries into separate entities so that each one of them can pursue its own goals, amid growing supply crunch.

“It has been proposed to take up a study, to assess the need for restructuring of CIL in light of the avoidance of drawbacks inherent in a monopolistic situation and to prepare a road map for smooth transition towards proposed restructuring”, said the ministry.

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