New Delhi: Coal India Ltd (CIL) may have
been given a government direction to commit a minimum fuel
supply to the power producers, but the government has put on
hold its plan to end CIL monopoly in the wake of stiff
opposition from the trade unions and political parties.
"Opening up of coal sector for commercial mining is not
possible now in the wake of stiff opposition by trade unions
and lack of consensus among political parties," Coal
Minister Sriprakash Jaiswal said.
A bill for amending the Coal Mines Nationalisation Act,
which gives the exclusive rights of commercial coal-mining to the government-owned companies, has been pending in the Rajya
Sabha for over a decade.
"We do not yet have environment for commercial mining of
the coal sector. There is a fierce opposition from the trade
unions. (Besides) unless major political parties are ready for
it, commercial mining would not start in the country," Jaiswal
As a holding company which 90 per cent government stake,
CIL has seven subsidiaries which produce coal. Its eighth
subsidiary is into design and planning of the mines. Together,
they produce 436 million tonnes coal accounting for 80 per
cent of the country`s production.
The coal sector was nationalised in 1973.
CIL is not able to meet the total demand from the
consumers and the country faces annual shortage of 140 million
Consequently, the bulk consumers like the power plants
are forced to go in for coal imports.
As the government wants to improve the efficiency of CIL
as also ensure fuel supply to the power producers, it has
issued a Presidential direction to the PSU to enter into fuel
supply agreement with the power plants. Coal India has to
commit at least 80 per cent delivery failing which it will
The move, however, did not go well with the independent
directors of the Rs 50,000 crore company. The board of
directors is likely to meet next week.
There has been a demand from certain quarters,
particularly from the private sector to denationalise the coal