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ECL wants Coal Ministry to hasten revival process

Badal Sanyal

CALCUTTA, July 10

UNCERTAINTY persists over the revival of Eastern Coalfields Ltd (ECL) as the Union Coal Ministry has failed to prepare a scheme suitable for this sensitive subsidiary of Coal India Ltd (CIL). ECL has 116 collieries spread over 1,620 sq. km., mostly in We st Bengal and partly in Bihar.

Though the Ministry is aware of the problems faced by ECL since its formation in 1972-73, informed quarters said it did not accord priority to preparation of a revival scheme for the company which produces the best type of non-coking coal with average 20 per cent ash content.

Having a total reserve of 35 billion tonnes, ECL will still be in a position to meet the country's requirement of good quality non-coking coal to a large extent provided the Centre comes out with a rational revival scheme.

Mr. N. T. Shanmugham, Union Minister of State in charge of Coal, during his recent visit to the ECL headquarters at Sanctoria in West Bengal, was told that the company would continue to incur a loss on an average of Rs. 115 for producing each tonne of co al, when its net worth at the start of April 2000 turned negative by Rs. 657.59 crores.

Mr. Shanmugham is learnt to have assured the ECL management that he would not hesitate to take measures to bail out ECL from the present crisis.

The ECL management, in turn, urged the Minister to immediately increase the `stowing subsidy' to 100 per cent, reduce import duty on mining equipment and its spares, arrange funds at the rate of Rs. 120 crores per year for funding VRS during next three years and implement the ICICI recommendations on the revival of ECL, which has already been referred to BIFR.

Mr. Shanmugham was also requested to direct CIL to convert its loan of Rs. 615.57 crores to ECL into equity, and that the total accumulated liabilities of Rs. 1,062.46 crores of ECL should be paid by CIL. The same should be converted into equity. Moreov er, the increase in wages as per the National Coal Wage Agreement-VI should be subsidised by CIL.

According to sources, the ECL management also wants to involve the West Bengal Government in the revival of ECL. The Minister was, therefore, urged to take up the matter with the West Bengal Government with a request to waive its existing dues of Rs. 882 .98 crores against cess.