The Hindu Business Line : Coal India changes procurement policy

CIL procures about Rs 10,000 crore worth of goods and services annually. “We are introducing Integrity Pact (IP) in our procurement and contracting system. It will be implemented with immediate effect,” the Coal India Chairman, Mr P.S. Bhattacharya, told a meeting of vendors here.

The company has entered into an MoU with the Geneva-based Transparency International in this regard.

According to him, in the new system it is mandatory for vendors to enter into the integrity pact. “We will also introduce rating system for vendors,” he said. A senior CIL official said that the Cabinet Committee on Economic Affairs (CCEA) is expected to take a call on empowering Coal India Ltd (CIL) to acquire mining assets abroad. The empowerment will be subjected to an upper ceiling for investment in foreign currency.

According to sources, a proposal in this regard is submitted by the Coal Ministry to the Cabinet in August. “A Cabinet note is already circulated in this regard to the related ministries. We are expecting the CCEA to take a decision in this regard shortly,” the source said.

Coal India is not empowered to make any investment in foreign currency. Accordingly the company’s proposals (including proposal for conducting due diligence) are now routed through the Foreign Investment Promotion Board.

“The existing system costs us precious time before we spot an opportunity and takes necessary steps towards acquisition,” the official said. Coal India is planning to acquire assets abroad for quite some time. While the company’s initial plan to form an SPV in the line of ONGC Videsh was shot down by the Centre, CIL is negotiating with SAIL and NTPC possible equity collaboration in such foreign acquisitions.

On the opportunities abroad, the sources said that discussions are in an advanced stage for acquisition of coal mining asset in Australia. The CIL chairman said: “We are looking forward to acquire mining assets abroad and have recently communicated to the Centre for the requisite empowerment.”