Amid the Coalgate controversy, Coal India subsidiary Western Coalfields Ltd (WCL), is planning to take innovative initiatives to bring in transparency in its operations. In an interview with Sanjay Jog, WCL CMD D C Garg explains the company’s future plans. Edited excerpts:
How is WCL planning to curb illegal mining and improve efficiency?
Let me first clarify that WCL’s area of operations in Maharashtra and Madhya Pradesh is free from the menace of illegal mining. However, we lay emphasis on making our operations more transparent with better efficiency and innovation. We propose to launch global positioning system (GPS) based truck monitoring. This unique initiative will track movements of coal trucks and arrest en-route pilferage of coal. The project will ensure higher productivity and speedy coal movement. An internal study by Coal India on opencast mines, where heavy earth moving machinery usage is prevalent, showed that losses could run over Rs 50,000 if a 170-tonne truck at any of its mines remained idle for half an hour. The loss will be almost double with a 240-tonne truck.
WCL had held discussions on August 9 with representatives of 19 prospective bidders including ITI (Mumbai), CMC (Nagpur), NIIT Technologies (New Delhi), Neco (Nagpur) and V Link, (Chennai).
WCL is not exploring the joint venture partnership model with the private sector to expand its production. Instead, we will adopt the MDO (mine development operation) route. The idea is that the MDO will operate the mine as a contractor for 20 years. In this model, WCL will take care of land acquisition and major infrastructure required to be put in place for mining, while MDO will operate the mine on a turnkey basis for 20 years. WCL believes that ultimately, a long-term relationship pays. MDO can bring in the requisite technologies and pass on some of the efficiencies of large scale operations. The initiative is in conceptual stage. A lot of deliberations will be ensured to seal the gaps, if any.
So far, WCL has identified Dhankasa and Jamunia mines in Madhya Pradesh and Nand block, Umrer and Borda, Morpar extension in Maharashtra for launching the MDO model. This model has already been implemented in a few mines by Eastern Coalfields Ltd, Mahanadi Coalfields Ltd and Bharat Coking Coal Ltd. We are watching the experience to get the second mover advantage.
What steps have you taken for e-procurement?
E-procurement refers to processing of procurement case of goods and services through online using the web-based technology. At present, e-tendering with e-price bid option is adopted. Other options such as e-tendering e-price bid followed by reverse auction will also be adopted. Last year, we procured 90 per cent of our major stores amounting to Rs 270 crore through e-procurement. This year, the tally will be 100 per cent procurements through this route. The idea is to enhance the effectiveness and user-friendly interface.
What measures has WCL taken to expedite the 20 projects that are stuck for want of various clearances and rehabilitation issues?
It is true that environment and forest clearance is a time-consuming process; so is land acquisition. Nearly 20 projects, spreading over 7,500 hectares of land, are currently held up as WCL has yet to get environment and forest clearances. The Forest Act, 1980 is crucial for getting forest clearance. During the current financial year, WCL’s coal production of 3.15 million tonne is affected due to lack of forest clearance for couple of mines in Maharashtra and Madhya Pradesh. We are making all efforts to get it on a priority basis.
Land acquisition is done as per the provisions of Coal Bearing Area Act and Land Acquisition Act, 1894. As much as 3,500 hectare, out of the total 7,500 hectare required for the 20 projects, has already been acquired. The balance will be acquired shortly. The revision in compensation packages by Coal India and the Maharashtra government will come in handy to complete land acquisition. The revised package envisages compensation of Rs 6 lakh per acre for barren land, Rs 8 lakh per acre for non-irrigated land and Rs 10 lakh per acre for irrigated land. Earlier, project-affected persons used to get compensation of between Rs 1 lakh and Rs 2.50 lakh per acre.
We hope to achieve coal production of 14-15 million tonne in a phased manner from these 20 mines over the next five years.
What is WCL’s production targets for FY2012-13?
WCL contributes nearly 8.19 per cent to the national coal production. During 2011-12, WCL produced 43.11 million tonne from its 82 operating mines. Our target for 2012-13 is 45 million tonne. We have planned a capital expenditure of Rs 350 crore in the current fiscal. During the 12th Plan period, our total investment will be Rs 2,200 crore.