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Badal Sanyal

KOLKATA, Nov. 13

THE State-owned Coal India Ltd (CIL) has decided in principle not to encourage its subsidiaries to set up new coal mining projects through the joint venture route. The projects identified for the Tenth Plan would be set up by the subsidiaries on their own, CIL sources said.

According to the source, CIL had, in fact, initially thought it would allow its subsidiaries to set up new large projects jointly with other promoters. But on second thoughts, it had asked its subsidiaries not to think along those lines. The subsidiaries, on the contrary, might be encouraged to buy machinery and equipment on credit from suppliers who would be asked to supply on `risk & gain' sharing basis.

The source explained that there was no need to involve any promoter because most of its subsidiaries, except Eastern Coalfields Ltd (ECL) and Bharat Coking Coal Ltd (BCCL), were now financially strong.

It was also mentioned that the commercial and financial institutions were interested in investing in the profit-making subsidiaries. What was interesting was that the banks were ready to invest even in Central Coalfields Ltd (CCL) because this subsidiary was expected to start earning profit during the current fiscal, although it incurred loses till the year 2001-02.

CCL was to set up two large opencast coal projects, namely, Amrapali and Magadhya, each with an annual production capacity of 12 million tonne (mt) of coal. These two projects, as per the original plan, were to set up through the joint venture route. But both the projects would now be set up by CCL itself.

The coal to be produced from these mines would be supplied to National Thermal Power Corporation's two proposed thermal power stations, one in Jharkhand and the other in Bihar, the source said.

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