No fresh equity, govt to shed 10% in CIL issue

NEW DELHI: State-owned Coal India (CIL) will not be allowed to issue fresh equity as part of the disinvestment programme. It will only sell 10% of government���s equity in the proposed public offer, coal minister Sriprakash Jaiswal said.

CIL���s initial public offer (IPO) is expected to hit the market in the next 18 months, he said at a conference.
���There is no need for CIL to raise fresh equity from the market due to its healthy cash position,��� he said. CIL is sitting on a cash reserves of over Rs 30,000 crore. The conference was organised to brief mediapersons about achievements of the ministry in the first 100 days of the UPA government.

The government���s shares will be largely disinvested in favour of families displaced due to coal mining activities and for its 4 lakh employees, he said.

CIL had earlier said that proceeds from the public offer would come handy in all its expansion projects besides funding rehabilitation and resettlement programmes. CIL plans to take up its coal production capacity from present 400 million tonnes to over 520 million tonnes by 2011-12.

Earlier, Mr Jaiswal said that coal ministry is in favour of de-regulating coal prices and institute market determined pricing mechanism. ���We agree to all the recommendations made by the Planning Commission including market-linked prices for coal. But no decision on price increase has been taken yet,��� the minister said.

The Planning Commission has favoured the prices of coal to be fixed by the market forces. Even though the coal prices were deregulated in 2000, the rates are fixed by the state owned coal companies under the aegis of the ministry of coal.

���Government is trying to develop a mechanism to reduce the burden on CIL on account of upward wage-revision of its employees,��� said Mr Jaiswal. CIL has made a demand to increase coal prices on account of the wage revision towards its employees.

The minister, who headed a delegation to Australia recently, said reflected on possible agreements with the private coal producers to augment coal production. He also said that government was also looking at cooperation between India and Indonesia in the coal sector. This could also translate into CIL getting preferential allotment of coal
blocks.

Mr Jaiswal said under the 100-days action plan the six-point agenda unveiled by the ministry had been achieved. The agenda among others included formulation of guidelines for mine closure for coal companies, setting up of empowered committee of secretaries to facilitate CIL���s investment abroad beyond Rs 1,000 crore.