Coal India Ltd.

The government has invited bids on January 7, for the appointment of advisors to restructure country’s largest coal producer, Coal India (CIL). Further, the mandate for consultants who would be invited to draw up a plan includes advising the coal ministry on the efficacy of the “current management structure” of CIL and also to ascertain the drawbacks inherent in a monopolistic situation. Moreover, the expressions of interest (EoI) also mandates that the consultants to furnish a report within three months to help the government decide upon their recommendations.

Meanwhile, this development comes in the backdrop of the Coal Ministry notifying the Prime Minister’s Office (PMO) on its plans to expedite the much-delayed proposal on restructuring of the state-owned miner, which has been severely criticized to keep production in line with the demand from consumers in sectors such as power and steel.

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 restructuring of CIL, in view the rapidly increasing demand of coal and the need for enhancing coal production in order to make the coal sector competitive.

The Shankar committee had directed the government to go for the restructuring in the 12th Plan period (2012-17) which was accepted. Accordingly, the 12th Plan document pitches for spinning off the CIL’s subsidiaries as separate public sector companies encouraged to develop their own strategies of coal development, including joint venture activities and acquisition of assets abroad.