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| CIL may hike price of all grades of coal |
| Jayajit Dash / Bhubaneswar May 27, 2009, 00:06 IST |
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Weighed down by the Rs 4,000 crore per annum on account of the upward revision in salaries of its 400,000 employees under the National Coal Wage Agreement (NCWA)-VIIII, Coal India Limited (CIL) is set to go in for an across-the-board hike in coal prices.
Confirming the development, a senior CIL official said, “The hike in price of coal by CIL is inevitable and it would be applicable to all grades of coal. The board of directors of CIL is empowered to hike coal prices. But the coal PSU would approach the new government at the Centre keeping in view the impact of an increase in coal prices on the economy as a whole.”
However, the official declined to comment on the percentage of hike in coal prices and also on the time-frame of the price hike.
The implementation of the NCWA-VIII posed a serious threat to CIL’s bottomline and the price hike of coal was needed for the coal public sector undertaking (PSU) to remain profitable.
CIL’s net profit in 2008-09 stood at only Rs 96 crore after the navratna coal firm paid arrears of Rs 7,856 crore to its employees as a result of the hike in salaries under NCWA-VIII which was to be implemented with retrospective effect from July 2006. The coal PSU had recorded a net profit of Rs 5,233.46 crore in 2008-09.
The salary hike had rendered 33 projects of CIL unviable which were to be taken up in the 11th Plan (2007-12) and they were to add 28.37 million tonnes of coal production per annum. The hike in salaries had also sparked fears of the possibility of CIL missing its target output by the end of 2011-12 which was projected at 520 million tonnes.
It may be noted that CIL had announced hike in prices of coal three times since 2000 and the last price hike was in December 2007.
The average price of coal sold by CIL was 30-35 per cent lower than the prevailing international prices of the raw material even though the spot price of hard coking coal in the international market had drastically fallen to $130 a tonne after touching an all-time high of $300 in 2007.
Bharat Coking Coal Limited (BCCL), one of the subsidiaries of CIL supplied washed coking coal to its consumers at Rs 6,300 per tonne and raw thermal coal at about Rs 1,200 per tonne.
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