Question : PRODUCTION DEMAND OF COAL

THE MINISTER OF STATE FOR COAL

(N.T.SHANMUGAM)

(a)&(c) Demand of coal is assessed by Planning Commission in consultation with Ministries of Power, Steel, Coal and Industry etc, on the basis of projected demand of the consumers. This demand is decided before the start of the year. Very often, the actual requirement and off take of coal varies from the demand assessed by the Planning Commission.
The details of coal production and demand during the last two years are as under:

(million tonnes)
Year Demand Production

(Assessed by Planning
Commission)
1998-99 325.38 292.27
1999-2000 311.83 299.97

In 1998-99, coal companies regulated their production due to sluggish demand and low off take by consumers.
Consumers are importing coal, particularly coking coal and superior quality non-coking coal on account of inadequate availability of such coal from indigenous sources. Import of coal is also resorted to because of the present level of customs duty and railway freight make such imports cost competitive per unit of calorific value on certain locations.

(d)to(f) Out of eight subsidiary companies of Coal India Limited(CIL), three companies namely – Bharat Coking Coal Limited(BCCL), Eastern Coalfields Limited(ECL) and Central Coalfields Limited(CCL) are making losses.
In February, 1996, a package of capital restructuring of CIL was approved by the Government whereby CIL’s overdue liabilities of Rs. 2228.57 crores were taken care of by waiver of arrears of interest, partly by conversion to preference equity and partly by moratorium on repayment and interest accrual. These benefits were passed on to the loss making subsidiaries such as ECL and BCCL. Further, in order to improve the performance of the loss making companies of ECL and BCCL, CIL had effected an internal restructuring of the equity and loan structure of its subsidiaries whereby debts of Rs. 994 crores in ECL and RS. 1180.70 crores in BCCL were converted into equity. Despite a number of measures taken to improve the financial position of the loss making companies, these companies continue to incur losses. Therefore, CIL, the holding company engaged Industrial Credit and Investment Corporation of India Limited(ICICI) to suggest measures for revival of ECL and BCCL. The ICICI report on ECL and BCCL revival has been received. As regards CCL, CIL Board has engaged IDBI for suggesting revival plans.