Govt sets the ball rolling on restructuring Coal India

Coal

The government invited bids on Monday for the appointment of advisors to restructure Coal India Ltd — the country's largest coal producer.

The development comes in the backdrop of the Coal Ministry informing the Prime Minister's Office on its plans to expedite the much-delayed proposal on restructuring of the state-owned miner, which has come under fire for failing to keep production in line with the demand from consumers in sectors such as power and steel.

"Ministry of Coal invites expression of interest (EoI) from the consultancy firms/organisations for taking up the job of providing consultancy for restructuring of Coal India (CIL)," the posting on the coal ministry website said. The mandate for consultants who would be asked to come up with a plan includes advising the coal ministry on the efficacy of the "current management structure" of CIL and also to ascertain the drawbacks inherent in a monopolistic situation.

The EoI mandates that a the consultants should delve into CIL's management and functional issues and furnish a report within three months to help the government decide upon their recommendations.

The Planning Commission and several high-level panels, including the Expert Committee on the Road Map for coal sector reforms headed by TL Shankar — recommended a comprehensive restructuring of CIL keeping in view the rapidly increasing demand of coal and the need for enhancing coal production and to make the coal sector competitive.

The consultants would be entrusted the responsibility of assessing the need for restructuring the Maharatna company in the light of drawbacks inherent in a monopolistic situation and requirement of the company law and Sebi regulations. "The consultants should assess the need for evolving administrative structures, which would improve production and marketing with a special emphasis on customer satisfaction," according to the EoI.

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