Deloitte suggests 'internal changes' to reform Coal India

Jun 05 2014, 15:24 IST
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Coal India, which accounts for over 80 per cent of domestic coal production, has repeatedly failed to achieve its output target. Coal India, which accounts for over 80 per cent of domestic coal production, has repeatedly failed to achieve its output target.
SummaryConsultancy firm Deloitte was selected to study the restructuring of Coal India.

Consultancy firm Deloitte, which was selected to study the restructuring of Coal India, has recommended to the government options such as reforming the company and its nine subsidiaries through 'internal changes in structure, systems and roles.'

The consultancy firm also suggested to the coal ministry the setting up of independent mega regional companies or the phased creation of independent entities with the continuation of the holding company during the transition, according to a coal ministry document.

The coal ministry had appointed Deloitte Touche Tohmatsu India Pvt Ltd on September 16, 2013, to study the need for restructuring Coal India. The mining company, which accounts for over 80 per cent of domestic coal production, has repeatedly failed to achieve its output target.

Deloitte also made certain recommendations to be made throughout the organisation, irrespective of the restructuring exercise, according to the document.

These include greater use of private public participation in mine development and operations and technology adaptation through joint ventures and collaborations with global companies, the document said.

Coal India is a holding company with seven wholly owned coal-producing subsidiary companies, one mine planning and consultancy firm and one unit in Mozambique.

Deloitte also suggested restructuring options for Central Mine Planning and Design Institute Ltd (CMPDIL), Coal India's consultancy unit.

Deloitte said CMPDIL should either become an autonomous body under the coal ministry or a Coal India subsidiary with a sector planning department.

Deloitte had submitted a draft report on restructuring Coal India in December last year and had had carried out a comprehensive review of the company and its units. It visited the subsidiary companies and held meetings with officials, including the senior management of each unit and the chairman of Coal India.

The company produced 462 million tonnes of coal in 2013-14, missing the target of 482 million tonnes. In 2012-13, Coal India's output was 452.5 million tonnes, short of the target of 464 million tonnes.

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