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Saturday, Nov 02, 2002

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Rethink on future corporate structure of PSU coal cos

Badal Sanyal


THE grapevine has it that the Union Ministry of Coal and Mines is actively examining a proposal in favour of winding up Coal India Ltd (CIL) prior to the constitution of the Seventh Joint Bipartite Committee on Coal Industry (JBCCI-VII).

The committee is to undertake the responsibility of revising wages for over six lakh staff and workers directly employed in domestic coal companies.

JBCCI-VII, as per the MoU signed in New Delhi in August this year between the management and five central trade unions operating in the coal industry, is to be constituted by the Union Ministry of Coal and Mines by September 2002. The JBCCI-VI had expired in June 2001. Though the MoU was signed in the presence of Central Labour Commissioner and with the full knowledge of the concerned Ministry, the joint bipartite committee is yet to be constituted following fresh thinking about the future corporate structure of the public sector coal companies.

Since its formation in 1975, CIL has created a total of seven coal producing subsidiaries and a design and planning institute. And of the seven, three sick subsidiaries have been referred to the Board for Industrial and Financial Reconstruction (BIFR), while four others remain in good shape.

But what is worrying the Ministry is that two subsidiaries, namely Eastern Coalfields Ltd (ECL) and Bharat Coking Coal Ltd (BCCL) employ in excess of two lakh employees and these companies are struggling to meet their day-to-day expenditure and have defaulted on the payment of statutory dues. Incidentally, the financial position of Central Coalfields Ltd (CCL) is also not sound. In the given situation, the Ministry may prefer to determine wages for each subsidiary separately, distancing CIL from the wage negotiation process.

It is argued by a source in CIL that in terms of guidelines prepared by Department of Public Enterprises, the companies which have been referred to BIFR and have been declared sick, cannot take on additional liability by way of wage revision. Therefore, in view of the above, JBCCI, as and when constituted, will have to take these factors into consideration and decide whether it can evolve a differential wage pattern, linking the same to capacity to pay of the subsidiary company.

Therefore, this will be a major deviation from the earlier practice of evolving a common wage pattern for all companies. According to sources, in case it is agreed to revise the wage structure of loss-making companies, the additional financial support will have to be provided by the Government, which would also be a major policy decision. Such major decisions should have to be taken since CIL cannot transfer the funds from the profit making subsidiaries to loss making ones to meet the wage liability.

Meanwhile, Tata Iron and Steel and Indian Iron & Steel Company (IISCO) have informed that they were no longer willing to participate in the JBCCI. Incidentally, IISCO is in no position to revise wage structure since it has been referred to BIFR.

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