What Ails Coal Industry?

M K Pandhe

THE union minister of state for coal, Dr Dasari Narayan Rao, recently convened a meeting of federations working in coal industry along with chiefs of all coal companies to discuss the question of improving the production and productivity of coal mines so that all the national requirement of coal can be met indigenously. All the members of the JBCCI were invited to attend the meeting.

The representatives of trade unions pointed out how the coal industry is not faring well due to mismanagement and bad planning. They criticised the role of the department of coal, which interfered in the day-to-day functioning of the coal industry and which was not allowing any autonomy to the Coal India authorities. As a result, there is no accountability for the inefficient operation of the mining industry. They pointed out that public sector coal industry has potential to meet all the national requirements for the next plan period and demanded the withdrawal of pending bill in parliament to repeal the Coal Mines Nationalisation Act for providing privatisation of the coal mining industry.  

The workers’ representatives assured full cooperation in increasing production and productivity provided the government does not resort to privatisation and outsourcing. They reminded the government the status of affairs in the coal industry when it was in the private sector and how mafias and gangsters were running the mines. The Gorakhpuri labour camps, where the workers were living as prisoners in a barbed wire compound, was one example of the state of affairs, they said.

INFRASTRUCTURE STATUS

The trade unions demanded that the central government should accept their demand for giving infrastructure status for the coal industry. Today, the power sector has been given this status but the coal industry that supplies coal to power sector is denied this status. The government is spending thousands of crores of rupees for the development of power sector in the next plan period, but it is denying investment for the coal industry to ensure adequate supply of raw material to the power sector.

The united trade union movement in the coal industry stressed the need to retain the industry in public sector, given its core nature. They also made it clear that they would bitterly oppose any move for privatisation of coal industry. If the central government decided to grant infrastructure status, the coal workers will do everything to ensure adequate supply of coal to the country in the forthcoming period.

The trade unions have strongly pressed the need for restructuring the coal industry and forming a unitary coal company. The Coal India Limited (CIL) company is adding to the cost of production and making administration top heavy. At present, profit-making coal companies are paying more than Rs 1500 crore as tax to the government while BCCL and ECL are in losses and have been referred to BIFR. A unitary coal company will take such companies out of BIFR without any delay. The profit-making units can also help the loss-making companies in their revival packages. However, the government has not yet accepted this reasonable proposal, which simplifies the administration of coal industry. The officials of Coal India and subsidiary companies do not support the proposal due to involvement of vested interests.

The CIL is today running the industry in a highly bureaucratic manner. While the manpower is being reduced by declaring the employees as surplus, the number of officers is going up every year. The management is talking about ‘all man - all jobs’ principle for the workers but the officers are doing only one job and refuse to take up additional responsibility. The officials are not prepared to do multi-skill responsibility but they want to insist that workers should do the same This situation requires to be changed if the performance of the coal industry has to improve considerably.

There are number of competent officials in coal industry whose technical knowledge about the industry is unquestionable. However, their talents are not being properly utilised since sycophancy is given more importance than quality and also due to the top-heavy bureaucracy prevalent in coal industry.

POOR UTILISATION OF EQUIPMENT

The record of utilisation and machinery is extremely poor in the coal industry. If the costly equipment remains unutilised, it adds to the cost of production and results in inefficient running of the undertaking. The maintenance of the machines is not properly done, resulting in frequent breakdowns. The poor availability of the machines is due to longer period of breakdown and delay in repairing the equipment.

            According to official figures, the poor availability and utilisation of the Heavy Earth Moving Machinery in Coal India during April-June, 2005 was considerable.

Utilisation of Equipment (in percentage)

In the case of ECL, which is a sick company, during the same period, utilisation of equipment despite availability was as follows: (in percentage terms) Shovel - 23; Dumper – 28; Dozer-39 and Drill - 49. Similarly, in case of BCCL, the non-utilisation of machinery was like this: Shovel – 18; Dumper – 22; Dozer – 19; and Drill – 26;

If the utilisation of machinery is improved sizeably, it can contribute a great deal in overcoming the sickness of these two companies. The performance of these two companies is much below the norm fixed by the CMPDI.

As a member of sub-committee appointed by CIL some years ago, I found that poor availability of equipment was due to lack of adequate workshop facilities in Coal India which results in failure to repair the equipment in time. However, CIL management failed to take any step to improve the matters with the result that the situation does not show any improvement.

Instead of improving the availability and utilisation of the machinery, CIL has adopted the practice of hiring equipment from outside. This has only added to the cost of production and resultant failure to ensure full utilisation of equipment and consequent addition to the production.

A very dangerous practice is observed in coal industry regarding the equipment. It has been observed that the management of a coal company sells equipment to a contractor on the plea that it has become unusable. However, the same equipment is taken on hire by another subsidiary of coal industry. Despite the trade unions repeatedly pointing out this malpractice, the system continues unabated resulting in great loss of resources to coal industry. However, the corrupt officials get the advantage of this malpractice in league with unscrupulous contractors.

NEGLECT OF UNDERGROUND PRODUCTION

While good quality coal is available in underground mines, the management has neglected underground production. Most of the target of coal production by CIL for the year 2005-06 would be achieved through open cast mines. The target for underground coal production for the same year stood at only 49.39 million tonnes.

The management of coal industry has been arguing about low productivity of underground mines. According to the claim of the management while open cast output per man shift was 7.18 tonnes during April-June 2005, the same in case of underground mines was only 0.7 tonnes. Attempt, however, is being made to hide the realities.

Attempts to modernise the underground mines were lacking since nationalisation. Quite often, the choice of technology was wrong and not suitable to the mining conditions. At times, the technology was decided by bureaucrats and political bigwigs not taking into consideration the requirement of the mine but the availability of kickbacks. There is no wonder that while mining and allied machinery was allowed to rot and closed down while reckless import of mining equipment was undertaken by the government.

Non-availability of equipment and manpower in underground mines led to low productivity and heavy losses to coalmines. But the managements in coal mines continue its purposeful neglect with the result that the underground coal production is unable to make progress despite its huge potential.

Non-availability of land is a big problem for open cast mines. The decision of the government not to give jobs to persons whose land is taken over by the management is resulting in several disputes with those who lost land. There is a limit beyond which open cast mine does not become viable. However, the managements are taking a short-sighted policy and continue to ignore the development of underground mines. This is affecting the growth of coal production in the country.

The neglect of underground production and emphasis on open cast production during the last five years reflects the slow growth of coal production in the country (see Table 2)

Raw Coal Production By CIL

(2000-01 to 2004-05; in million tonnes)

(Table 2)

Unless Coal India gives necessary importance to develop underground production the requirement of country cannot be fulfilled. In China bulk of the coal production is from underground mines which only highlights the sad neglect done by CIL to develop underground coal production to meet national requirement.

UNSAFE MINING CONDITIONS

The violation of safety rules by the Coal India management is leading to loss of precious life of coal miners every year. During January-June 2005 alone there have been 35 fatal accidents responsible for killing of 37 coal miners. This excludes the 14 fatalities at Central Sounda mine in CCL. Thus the total fatalities in the first half of the year 2005 amount to 51.

Repeated court of inquiries have pointed out the causes of the accidents but accidents occur frequently due to the callous attitude towards and  non-observance of safety rules by the CIL management. The number of workers getting injured in mine accidents are in hundreds highlighting the unsafe conditions prevailing in the coal mines. Many accidents are not reported which makes the official statistics gross underestimation.

The safety board in Coal India is a defunct body and the management is not making any serious efforts to develop internal safety organisation. The pit safety committees and provision for worker inspectors have been reduced to mere rituals in coal industry due to the attitude of the managements. Thus the unsafe mining conditions have become a bottleneck in higher rate of growth of coal output.

ILLEGAL COAL MINING

Trade union leaders pointed out that millions of tonnes of coal is produced in the country illegally with full knowledge of Coal India management and local administrations. Since several unemployed persons are getting a source of livelihood in these illegal mines, it has become a social problem in the coal belt. The coal is sold illegally in the market but the local administration is acting like a silent spectator. The contractors who indulge in this practice are offering kickbacks to coal managements and local administration which enables them to carry forward their illegal activity without any penal action.

As if this is not enough, theft of coal is taking place in broad daylight in most of the coal companies. It is stated that about Rs 1000 crore worth  coal is pilfered in coal mines with full knowledge of Coal India and local administration. A well planned organisation is operating illegally all over India and several mafias are involved in this operation. Trade unions demanded that these anti-social activity must come to an end and all gangs operating in colliery areas should be dealt with severely without any delay.

FALLACY OF SURPLUS MANPOWER

As per government directive, Coal India management has been taking steps to downsize manpower by declaring surplus manpower in each coal company. The BCCL management has declared 9234 manpower surplus despite drastically reducing the manpower during the last couple of years. The CCL management in a similar manner has declared 8387 manpower surplus while ECL has declared 5228 surplus manpower.

While the regular manpower is declared surplus, their work is being getting done by contract workers through outsourcing of operations. This is a clear method of reducing regular manpower and increasing contract labour with low wages. In the last decade, CIL has reduced more than one lakh manpower and it further continues to reduce it through voluntary retirement scheme (VRS). This VRS is not at all voluntary since workers are forced to leave through various dubious methods adopted by the management. The BCCL, CCL and ECL have fixed the target of 1000 each to be reduced through the VRS route which clearly indicates the game of the CIL management. The posts lying vacant due to normal retirement are not filled in which results in further  reduction of manpower in coal industry.

ROLE OF MAFIAS

Handing over the operation of coal mines to mafias has resulted in open induction of gangsterism in coal mines. The workers are paid paltry wages of about Rs 50 per day and no labour laws are implemented in these mines. Trade union movement is suppressed with the help of musclemen engaged by mafias. The labour ministry has exempted BCCL and ECL from the purview of some important sections of the Contract Labour (Regulation and Abolition) Act.

Several blocks have been earmarked by Coal India for handing over to the private contractors who are mercilessly exploiting the workers and making quick money at the cost of living conditions of workers. The extent of contractorisation through outsourcing is so widespread in coal mines that out of 325 million tonnes of coal produced by Coal India during the last year, 165 million tonnes have been produced by outsourcing!  In Mahanadi Coal Field two third of coal is produced through  contract workers.

A close link between Coal India officials and contractor-mafias exists to share the booty. Hence CIL officials are taking more and more interest in handing over the mining operations to contractors. This has resulted in CIL blatantly ignoring the implementation of its responsibility as a principle employer under Contract Labour (R&A) Act.

The talk for improving the production and productivity of coal mines does not yield any result unless Coal India management stops the present policy of contractorisation and patronisation of the coal mafias in the industry.