Despite having received a report on restructuring of Coal India ltd (CIl) a couple of months back, the Government has been sitting on the recommendations suggested by Deloitte, the consultant appointed by it to suggest the methodology for undertaking the process.
The feeling within official circles is that with the Maharatna Company having already come out with a special interim dividend worth Rs 19,000 crore in February this year and having helped the Government generate funds, and also with the Government reaching the fag end of its tenure, the restructuring can be looked into by the new dispensation which will take over in a couple of months time.
Deloitte had been hired by the Government last year to suggest the methodology for restructuring CIl. The Planning Commission and the Expert Committee on Road Map for Coal Sector Reforms, also known as the T l Shankar Committee, had recommended restructuring of the Maharatna company by dividing all its subsidiaries into small entities which would compete among themselves thus leading to enhancement in production.
The Coal Ministry though has been sitting on Deloitte's report on the matter since the last two months and the general refrain from its officials is that it is being studied. Sources though pointed out that Coal Minister Sriprakash Jaiswal himself was not too keen to implement the process, considering that when the report was submitted to the ministry, only two months were left for lok Sabha polls to commence and during the same time CIl had presented the Government with the special interim dividend.
It was felt that with the Maharatna Company having helped the Government meet its funds demand, its restructuring should not be hurried with. Subsequently the Deloitte's report has since been moving from official to another within the ministry and now with the general elections having begun, it is quite clear that CIl's restructuring exercise would now have to be undertaken by the new Government which comes to power at the Centre.
Apart from the restructuring exercise, CIl's follow-on public offer (FPO) has also been kept on the backburner, especially after the company came up with the special interim dividend.
The Planning Commission and the T l Shankar Committee had recommended restructuring CIl in view of the rapidly increasing demand for coal, the need to enhance production and to make the sector competitive.
CIl, the single largest coal producer in the world, accounts for 81 per cent of India's output of the fuel. It operates through 81 mining areas and has seven wholly owned coal producing subsidiaries and one mine planning and consultancy entity.
The Coal Ministry had selected Deloitte from among nine shortlisted companies, including ICICI Securities, KPMG, Ernst & Young, McKinsey and Crisil. As many as 17 firms, including SBI Capital and Infosys, had responded to the invitation for the consultancy proposal which was put out last year.
The Coal Ministry had informed the Prime Minister's Office that it would appoint a consultant with international expertise to frame the time line to take forward the restructuring of the miner.