Press Information Bureau

Government of India

Ministry of Coal

08-January-2013 15:46 IST

Ministry of Coal has invited Expression of Interest (EIO) for providing consultancy for restructuring of Coal India Limited (CIL) a Maharatna Public Sector Undertaking of Govt. of India. Objective is to examine various issues for restructuring of CIL. These issues include:

• To examine the recommendations of various Committees and the planning Commission regarding the need for restructuring of CIL;

• To assess the effectiveness of the current management structure in meeting the objectives of the Company enunciated in the Articles of Association;

• To assess the need for restructuring of CIL in light of the avoidance of drawbacks inherent in a monopolistic situation and requirements of the Company Law and SEBI regulations and tax laws;

• To assess the scope for improving competition amongst coal mining companies which should improve production and marketing with the special emphasis on customer satisfaction.

• To assess the need for evolving administrative structures which would promote capability enhancement in individual companies to undertake planning and implementation of innovative technologies;

• To assess the current financial strengths and scope for better investment plans for enhanced production with suitable administrative control; and

• To prepare a Road Map for smooth transition towards proposed Restructuring.

Since establishment of CIL in 1975, there have been significant changes in the energy policy of the country particularly after the onset of economic liberalization in the early 1990s. The coal sector has been partially opened for private investment to captive consumption. Coal development policy has evolved over a period of time leading to doing away with the administrative price mechanism/decontrol of coal price and distribution, empowerment of performing public sector coal companies, etc. The planning Commission and a number of high level committees including Expert Committee on Road Map for Coal Sector reforms, T.L. Shankar Committee, recommended restructuring of CIL keeping in view the rapidly increasing demand for coal and the need for enhancing coal production and to make the coal industry competitive in the rapidly changing economic scenario.

In light of the above, it has been proposed to take up a study for restructuring of Coal India Limited to address the following issues with a view to strengthen coal development in the country.

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NCJ/RV

Restructuring of Coal India Limited to assess governance, legal compliance, competition and a practicable transition roadmap. Invitation for consultancy to study and prepare a Road Map for the restructuring of Coal India Limited, including examination of committee and Planning Commission recommendations; assessment of current management structures against the Articles of Association; evaluation of restructuring needs in light of monopolistic risks and compliance with company law, SEBI regulations and tax laws; measures to enhance competition, production and marketing; review of administrative structures for capability enhancement; and analysis of financial strength and investment options to support the transition.