Apr 22, 2013, 07.38 PM | Source: CNBC-TV18
State-run Coal India has not received any communication from the government regarding stake sale in the company said Narsing Rao, chairman and managing director of Coal India.
The government currently holds 90 percent stake in Coal India (CIL) and is keen to divest around 10 percent stake. At the current price, a sale of 56.84 crore shares, or 10 percent of government holding, could fetch around Rs 17,000 crore to the exchequer.
Meanwhile, talking about its ongoing tussle with NTPC over coal quality and supply issues, Rao said that the latter has raised issues quality check issues from coal supplied from Rajmahal mine. The heads of the both the state-run companies met Coal Secretary S K Srivastava to find an amicable solution to the crisis, he said.
Below is the verbatim transcript of his interview to CNBC-TV18
Q: The first concern for most people is what is happening in this ongoing tussle with National Thermal Power Corporation (NTPC) and whether any resolution has been found in terms of signing the fuel supply agreements (FSAs) especially with regards to NTPC?
A: Yes, they have raised some issue about the deceit of lower than the build quality of coal in one particular place. That is from the Rajmahal mine. So, I and NTPC Chairman - had a meeting with the Coal Secretary. It was decided that they will participate in the giant sampling process on the kind of a pilot basis at the mine end, loading end, during the month of April and arrive at whatever is the actual quality. Accordingly we will take a view once the data is available at the end of the month of April.
Q: Can you give us more clarity on how many FSAs have been signed and how many are to be signed in the course of the next couple of months?
A: Around 61 have been signed. NTPC and its joint venture's number, I am not sure. Maybe it is 15 or 16, but the quantity is 24 million tonnes yet to be signed.
Q: Moving on to another subject. Have you heard anything with respect to the government divesting stake in Coal India and is a buyback being considered at any point?
A: No, on the coal price pooling as I stated some time back also, right since the month of November onwards this has been sort of fully seized by the government of India. The government of India is considering ministry of coal in consultation with power ministry, Central Electricity Authority (CEA), etc. The matter will be decided by the cabinet committee on economic affairs. I do not think I have anything to say on that nor any update I can give you.
As far as FSA is concerned, I think 61 FSAs have been signed by the power companies with a quantity of about 85 or 84 million tonnes per annum. The NTPC with a quantity for about 23- 24 million tonnes have not yet signed the FSAs.
They are drawing coal on the strength of the MoU. Finally, whether it is FSA or MoU, as far as the fact that coal companies get coal and we supply coal, both of us should be okay with that.
Q: The CCEA meets later today though to decide on the entire coal price pooling issue, any headway on that front?
A: FY14, the same situation remains that 65 percent for the new FSA holders, we shall supply from the domestic. The balance 15 percent we can take recourse to the imported. However, at the moment we are confident that we are able to supply 80 percent to the new FSA holders also.
From quarter to quarter we will review. If there is going to be any shortfall and should the consumer want it, we will always import and supply to them to reach upto 80 percent trigger.
Q: There is some disappointment as you know about the slippage in terms of the targets that were set out for FY13, any clarity or guidance you could share with us on FY14 and whether that looks on track?
A: Time and again I have mentioned about FY13. Certainly, we have missed the production target, but we were not unduly worried about that. Whatever may be the reasons but our endeavour was to supply coal according to the target. We have had a sufficient amount of ground stock. We could liquidate about 13.5 -14 million tonnes of coal.
Therefore, we were very close 99 percent of the target we have achieved in the offtake. Certainly, I can say during the FY14 also that as far as the offtake is concerned, we are very confident that we will be achieving.
So, will be the production but even in an unlikely event of production disruption if at all. There is still 55 million tonnes of ground stock - we will make up from the ground stock. So, we will certainly achieve out offtake target for FY14 also, that is 492 million tones.
Q: Finally, can you give us an indication of whether any coal price hike is coming because it has not been done for the past two years, are any negotiations on with respect to a price hike?
A: No, there is nothing like a negotiation. The coal price matter is entirely within the domain of the Coal India board. Obviously, during every board meeting the board looks at the cost of production and how is it progressing or changing and what is our average sales realization.
From time-to-time we discuss review and obviously the board will take a decision when it thinks it is appropriate to revise the price. I don’t think I can give any timeline because it is for the board to decide.