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CIL, IOC, MMTC give push to divestment

Source : BUSINESS_STANDARD
Last Updated: Thu, Jun 13, 2013 21:10 hrs
Laborers work in a railway coal yard on the outskirts of the western Indian city of Ahmedabad

The finance ministry is planning to go ahead with a 10 per cent stake sale in Coal India Ltd (CIL), which could fetch it around Rs 20,000 crore-half of its target of Rs 40,000 crore from disinvestment proceeds this year. Protests from workers' unions, however, might spoil the party as they threatened to go on an indefinite strike against the move.

This year's disinvestment programme kicked off on Thursday with 9.33 per cent stake sale in Metals and Minerals Trading Corporation (MMTC) through the offer for sale route. The issue was subscribed 1.55 times, fetching the exchequer Rs 568 crore. It received participation from financial institutions, retail investors and some foreign institutional investors.

Decks have also been cleared for the Indian Oil Corporation (IOC) disinvestment, with the petroleum ministry giving its nod for the issue. The Department of Disinvestment has moved the Cabinet for selling 10 per cent shares in IOC to raise Rs 7,000 crore. Stake sale is also likely in Indian Oil Corporation, Hindustan Aeronautics, Bharat Heavy Electricals Limited (Bhel) and Neyveli Lignite this year.

Even as unions harden their stance on it, Finance Minister P Chidambaram said CIL disinvestment was on the government agenda and the concerns of unions were being addressed. He said the government was confident of meeting its disinvestment target.

"If I disinvest in Coal India and if its raises Rs 20,000 crore, the entire money will go into the public sector. I am not using the money for current expenditure. Therefore, my appeal to the Coal India union is have no fear at all that we will use the money for other purposes. Whatever we are getting out of the disinvestment, we are putting it back to the PSU and PSBs," he told a press conference.

After threatening an indefinite strike in their letter to the Prime Minister, all the workers' unions, representing 3,50,000 employees of Coal India, in a show of strength, have called for a joint convention in Kolkata to register their protest.

"We have already said we will go for an indefinite strike if the government goes ahead with the CIL stake sale plan. On June 24, all workers' unions will meet at a joint convention of all five unions, where the issue will be raised," Jibon Roy, general secretary, CITU-ffiliated All India Coal Workers Federation, said.

The four other unions, who have joined the protest, are Indian National Mine Workers' Federation (affiliated to INTUC), Indian Mine Workers' Federation (affiliated to AITUC) and Hind Khadan Mazdoor Federation (affiliated to HMS).

The unions claimed there was an assurance from former finance minister Pranab Mukherjee at the time of the Coal India public issue in 2010 that there would be no further stake sale from the government.

"Also sometime in 2011, unions signed an agreement with the coal ministry on this. Coal is different from all other sectors. Government cannot do this with Coal India," said Roy.

In fact, they are also opposing the proposed restructuring of Coal India to make all the subsidiaries independent companies.

There has already been a round of meeting between CIL top officials and representatives of unions, but there has been no breakthrough so far. "We did meet the unions. They are still opposed to the stake sale plan. All unions have some political affiliations. Let us see, we will probably meet again," CIL chairman S Narsing Rao told Business Standard.

CIL officials indicated it would be difficult to break the deadlock, unless there is consensus at the political level. "But ahead of the general elections, it is going to be a difficult task," one official said.

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