Report on Coal India restructuring likely by December

Govt working on ways to boost output at world's largest coal producer

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The government, keen to increase coal production in the country, is in the process of selecting a consultant for a study on restructuring state-run Coal India (CIL) and expects to receive its report by December.

Following criticism over fuel shortages that have hurt power generation, the government is working on ways to boost output at the company, the world's largest coal producer.

"The Coal Ministry is in the process of selecting the consultant from the list of eligible firms, which is expected to be completed soon. The consultant's report is expected to be submitted to the Ministry by December," an official said.

The Coal Ministry had in June invited proposals from nine shortlisted firms, including ICICI Securities, KPMG, Ernst & Young, McKinsey, Deloitte and Crisil, for the study on restructuring Coal India.

"Invitation to respond to the RFP (Request for Proposal) is open to the nine firms," the Coal Ministry had said. The ministry had said it will select a consulting firm "from the bids received in response to the RFP."

The Planning Commission and many high-level panels, including the Expert Committee on Road Map for Coal Sector Reforms, known as the TL Shankar Committee, recommended that CIL be restructured in view of growing demand for the fuel and the need to enhance output and make the sector competitive.

Amid the growing shortage of coal, the Planning Commission had earlier suggested spinning off CIL subsidiaries into separate entities so that each could pursue its own goals.

CIL has seven subsidiaries including Bharat Coking Coal Ltd, Central Coalfields Ltd and Eastern Coalfields Ltd. The coal producer has more than 3.5 lakh employees.

The Coal Ministry had recently said the gap between demand and supply of coal, which touched 135 million tonnes last fiscal, may reach 140 million tonnes in 2013-14.

The government plans to sell a 5% stake in CIL. It has invited bids from merchant bankers by August 26 and will select as many as seven to manage the share sale.