Coal India against annual production target

Coal India Ltd (CIL), which may miss coal output target this fiscal, is pitching for doing away with the system of setting the annual production target for the PSU.

Instead of annual production targets, which are used by the government to judge its performance, the company wants annual targets be set for coal sales or dispatches. Coal India has a large inventory which it can use to make up for any shortfalls in production, to achieve the targets.

“Next year we have taken a conscious decision not to go with any production target ... What matters is the fuel supplies. So we wanted to go only for what we call in our terminology coal dispatch or coal offtake,” CIL Chairman and Managing Director S Narsing Rao told PTI in an interview here.

“Targets are no targets. The final target is off take,” Rao added.

However, the Maharatna firm which has convinced the Planning Commission on the same, is facing resistance on the proposal from the Coal Ministry.

“We have convinced the Planning Commission ... but somehow the MoU Committee and the Coal Ministry is insisting on coal production target, so we need to resolve that with them,” Rao said.

CIL has agreed to a dispatch or sale target of 492 million tonnes (MT) for the next financial year, against the dispatch target of 470 MT for 2012-13. As of now the company has dispatched 425.5 MT of coal.

Rao is of the view that between output and dispatch, it is easy to achieve production target as it is, unlike the off take target, under the control of the PSU firm.

“Somehow, we really achieve the target of production, since there are some problems the focus used to be less on the dispatch. That is why this imbalance of year on year adding of coal stocks,” said Rao.

At the end of last fiscal, the company’s piled up coal stock stood at 71 MT. CIL’s performance in the current fiscal on the coal dispatch front has been better due to the availability of the ground stock.

“As I speak to you today 30 MT of incremental offtake has taken place over the previous year, which is about 7.4 per cent growth.”

The company also expressed the hope that if off take target for current fiscal is met, CIL would end up with 37 MT of incremental off take.

“So if we have our way through, next year also this focus continues and not getting too much obsessive about the production part, we should be able to reduce ground stock by another 10-12 MT,” Rao said.

CIL, which has so far produced around 405 MT is likely to end the current fiscal at the level of around 452 MT. The company’s production target for the FY’13 is 464 MT.

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