Internal panel opposes proposal of separating CMPDIL from Coal India

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Rio Tinto's coal operations in Australia. Copyright © 2014 Rio Tinto (Picture for illustration purposes only)

A five-member panel has opposed the proposal of separating Central Mines Planning and Design Institute Ltd (CMPDIL) from Coal India, saying that the move could not be helpful for the miner which is pursuing a target of producing one billion tonne of the dry fuel by 2023-24.

The committee was formed by Voal India Limited (CIL) to assess the proposal and give its suggestions. CMPDIL, a fully-owned subsidiary of the Maharatna PSU, offers technical services to the coal behemoth. The panel comprising five general manager-level officers – one from CMPDIL and four from different departments of Coal India – has submitted its report to the miner by end of May.

It is believed the report prepared by the panel is against the separation of the technical arm of Coal India. It has also been forwarded to the Ministry of Coal for its consideration in the matter.  Coal India had set up the panel to “study of corporate independence of CIL and CMPDIL with critical appraisal of existing structure”.

The government wants the private sector to have access to a domestic consultancy firm, which is easily possible without the split of CMPDIL from the miner. If it is separated, there will be a mass exodus of talent from CMPDIL and Coal India will be left in the lurch for over 50 types of services that the technical subsidiary renders at a cost which is less than one per cent of the parent company’s revenue.

All mining majors have their own planning and exploration unit, and Coal India has also created and nurtured it for the same purpose. If it is split, CMPDIL will collapse as all executives are recruited by Coal India and they will move back to the Maharatna company. The CMPDIL has already provided services to external agencies, including a West Bengal PSU, without any conflict of interest. The unions are also expected to oppose the move.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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