CIL may not meet target output

With Coal India Limited (CIL) set to rework the viability of 77 out of 127 projects in the 11th Five Year Plan, its coal production may fall short of the target in the next three years.

The production targets for CIL has been pegged at 435 million tonnes (mt) in 2009-10 and 520 mt by 2012.

CIL has asked its fully owned subsidiary, Central Mine Planning and Design Institute (CMPDI) to examine the viability of 77 projects on account of the implementation of the National Coal Wage Agreement-VIII.

Besides, there would be an additional burden of Rs 500 crore because of the rise in salaries of CIL officers which has already been notified. According to the National Coal Wage Agreement-VIII, the wages of over 4 lakh employees of CIL and its eight subsidiaries would be revised and this means a financial burden of about Rs 1,800 crore on the coal PSU. The report from CMPDI on the viability of the projects is expected within a month.

“Out of the 127 projects of CIL in the 11th Plan, 50 projects have already been approved and CMPDI has been asked to examine the viability of the remaining 77 projects which are a mix of underground and open cast projects. Once some projects become unviable, it would definitely impact our coal output over the next three years”, a senior CIL official told Business Standard.

CIL would make efforts to meet its coal production target of 520 mt by 2012 and we will explore possibilities of alternative viable projects to achieve the targeted production, he added.

CIL was to take up implementation of 127 projects in the 11th Five Year Plan at an estimated investment of Rs 19,000 crore. CIL has recorded a production of 316.45 mt during April-January of 2008-09, a 7.1 per cent growth over 295.37 mt posted in the corresponding period of 2007-08.