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| CIL may get Centre's nod to raise coal prices by Dec |
| Jayajit Dash / Bhubaneswar Oct 09, 2009, 00:13 IST |
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State-run Coal India Limited (CIL), the world’s single largest coal miner is inching closer to its plan to go for an across the board hike in prices.
The navratna coal firm expects to get the nod of the coal ministry to raise prices before December.
“We are likely to get Centre’s approval to hike coal prices possibly by the end of this year or may be even earlier,” CIL chairman Partha S Bhattacharyya told Business Standard.
Though CIL had not specified the percentage of price hike it had sought for, industry sources said, the coal major was looking to increase prices by 10-12 per cent.
The average price of coal sold by CIL in the domestic market was 30-40 per cent lower than the prevailing international prices. CIL had last revised its prices in December 2007.
Besides, CIL which had set a tentative timeline to hit the capital markets by September 2010 needed to shore up its bottomline which was seriously dented in 2008-09 due to the implementation of the National Coal Wage Agreement (NCWA)-VIII.
CIL’s net profit in 2008-09 stood at only Rs 96 crore after the navratna coal firm paid arrears worth Rs 7,856 crore to its employees. Its retained earnings stood at Rs 300 crore by the end of 2008-09 on a turnover of Rs 45,000 crore
CIL has also recorded around 20 per cent decline in profit before tax in the first half of the current financial year due to wage revision. Coal India’s profit before tax for the April-September period of 2009-10 stood at Rs 3,615.68 crore compared to Rs 4,484.06 crore during the corresponding period of the previous financial year.
The NCWA-VIII agreement was to be implemented with retrospective effect from July 2007 for the labourers and November 2007 for the officers. According to the agreement, salaries of over 433,000 employees of CIL had to be revised. The salary hike meant an annual financial burden of around Rs 4,000 to the coal PSU (public sector undertaking). The implementation of NCWA-VIII had also rendered as many as 33 projects of CIL in the 11th Plan Period (2007-12) unviable.
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