It is quite the norm in India to bash public sector enterprises for their lack of drive, vision and imaginative leadership, while showering private sector firms with accolades for these very same qualities. But the recent skeletons tumbling out of the closets of loan defaulters, banks and project financiers from India’s private sector tell us that this perception is both stereotypical and flawed.

Role models for visionary leadership exist as much in India’s entrenched public sector enterprises, as in its Nifty 50 firms. If private sector top honchos make it to more magazine covers and have more paeans sung to them in corporate hagiographies, that’s probably because they are better at commissioning glossy coffee table books to trumpet their achievements.

It is for this reason that the business biography of Coal India, When Coal Turned Gold , one of India’s most valuable public sector undertakings (PSUs), written by its former Chairman Partha Sarathi Bhattacharyya, deserves to be read.

This is a very detailed and technical book, not designed for coffee tables by any stretch of imagination, that tells the story of India’s coal sector through the eyes of a career public sector professional.

Navigating a minefield

Joining Coal India as a management trainee in Finance in 1977, Bhattacharyya worked his way up its ranks to retire as its Chairman in 2011. He is thus able to offer an insider’s account of what it takes to turn around a loss-making PSU riddled with operational problems, take on its militant unions and burnish its public image to an extent where it managed a blockbuster listing on the bourses.

The author hasn’t tried to gloss over the cultural and governance problems that beset an unwieldy behemoth like Coal India. Anecdotes in the book shine light on the minefield that an ambitious PSU executive needs to navigate if he’s keen to get things moving.

First, there’s the constant tug-of-war between commercial sense, and pressure from the government to fulfil social objectives. While the prices charged by Coal India to its customers were supposed to be ‘deregulated’ from January 2000, in practise it was never allowed to revise its prices in keeping with market trends.

The unwritten rule was that prices could be only be raised to cover wage cost escalations negotiated with trade unions, once in a blue moon.

Coal India thus had to resort to a variety of machinations to gain even the bare minimum pricing power essential to sustain a profit.

Weeding out deep-rooted corruption in both procurement and the award of contracts often meant going head-to-head with political bosses and fighting in-house vested interests.

The book recounts may incidents where the author used unconventional means — from co-opting the local media to buttonholing ministers in airports — to overcome such hurdles.

Then, there’s the Sword of Damocles of ‘vigilance’. There’s the story of a Coal India subsidiary facing major production deficits owing to a severe shortage of off-the-road tyres for its mining equipment.

Though its losses were widening by the day and it received an unsolicited offer from a global tyre major for a five-year supply contract, its top brass was petrified of signing the deal for the fear of vigilance queries.

The deadlock was eventually broken by running the deal by the CVC in advance.

Though the book is autobiographical, Bhattacharyya manages to give a matter-of-fact account of the problems he encountered and resolved, without self-aggrandisement.

Grey areas

He also makes no effort to sweep under the carpet the more unsavoury aspects of the company he oversaw and admits to his feelings of helplessness at times.

One such poignant chapter is on fatal accidents caused by roof falls, inundations and gas explosions in the mining chambers. The author laments that though Coal India managed to significantly reduce accidents through global benchmarking, fatalities remained a fact of life. In such cases, the company would usually provide employment to the next of kin.

But he remained deeply dissatisfied by this arrangement and says: “The fact that the victim had laid down his life while trying to provide energy security to the nation and was therefore a martyr, was largely unrecognised….and the loss of income from the entry-level job offered to the next-of-kin was substantial”.

To remedy this, Coal India initiated a lumpsum compensation for the bereaved and inaugurated a Martyr’s Memorial at Koylanagar to record for posterity the sacrifices made by workers in this hazardous industry.

IPO make-over

One of the more interesting chapters in this book describes Coal India’s bridal makeover for its public market listing.

Bhattacharyya talks of how he began to prepare the ground for the IPO at least three years before the fact. He reached out to foreign institutional investors on every foreign trip for feedback on how they perceived Coal India.

After gathering that it had quite a black reputation in the investing community — it was perceived as a company that denuded large tracts of land, had abysmally low productivity and was corrupt — he went about systematically addressing these pain points.

Coal India’s fifty largest open-cast mines were chosen for time-bound land reclamation programmes. They were geo-tagged to verify compliance and obtain ISO 14001 certifications.

Stiff resistance from the trade unions to the disinvestment had to be overcome too, and Bhattacharyya managed this by convincing the employees to participate in the IPO.

In the home run to the IPO, Coal India drummed up positive media coverage by declaring a special dividend of ₹2,200 crore and getting the Prime Minister to accept the cheque.

Given the scant preparation with which PSU offers seem to hit the markets nowadays, requiring bailouts by the LIC, one hopes the Centre’s disinvestment managers are reading this book.

On the flip side, the book is a dry read, as it is written from a technocrat’s perspective, with very few human or humorous touches that one finds in more slickly produced corporate biographies.

The author’s tendency to launch into the nitty-gritties of how he de-tangled knotty financial or operational issues relating to tenders, pricing, wage negotiations et al , may only interest practising managers of PSUs, industrial firms, and mining professionals.

But it is a definite inspiration for ambitious managers in public sector enterprises or in the civil services, when things look black for their career.

 

MEET THE AUTHOR

Partha Sarathi Bhattacharyya joined Coal India Ltd as a management trainee in 1977 and ultimately went on to become its chairman and managing director in 2006. He engineered the country’s largest ever IPO, a ₹15,000-crore offer, which was subscribed over twelve times.

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