Labour and management together ruin ECL
THE mood is unusually black these days at Eastern Coalfields Ltd (ecl). One of West Bengal's oldest companies running 50 mines in the state and another 14 in Bihar, it has an accumulated loss of Rs 550 crore. The Centre has recently put off a proposal for closing it down. But for the company which holds the lifelines of nearly 73,000 employees, the postponement is like a reprieve before facing the firing squad.
Several ecl mines are beyond redemption, say sources at Coal India Ltd (cil), the holding company for public sector coal mines, quoting an icici study. And the huge losses are unsustainable. But West Bengal is against ecl's closure because of its huge stake in it.
Bengal stands to lose the livelihood of 11 lakh people. In this worker-friendly state, such estimates are not too difficult to make. The employees' family members numbering 2,86,240 and another 7.5 lakh small traders in Bihar and West Bengal are affected. Around 200 small factories supplying to these mines would also close, affecting 40,000 workers, 5,000 petty suppliers and 60,000 casual labourers. Entire small townships around the mines might turn into ghost settlements.
The concern is palpable but sympathy is hard to come by. For one, by deciding to shut ecl, cil seems to be jettisoning its responsibility of running its mines efficiently. As a trade union leader put it, it's like beheading a patient to cure his headaches. The icici study, which admits a lack of minewise technical information and detailed estimate of investments required, nowhere suggests closure. Even the R.N. Mishra Committee, recommending in 1993-94 steps to improve ecl, had not. cil itself had earlier estimated that the mines could be viable for the next 166 years.
In a letter to mines minister Dilip Roy, cpi(m) MP and trade unionist Dipankar Mukherjee pointed out that just before the cil board meet of October 22, the ministry had sent a report which said: Six mining areas of the ecl employing 71,516 workers... lost about Rs 422 crore in 1997-98. These areas should be completely closed down. If there are any mines which can be revived, a definite action plan for their revival may be prepared. This suggests that the ministry had already decided to wind up ecl.
But if closure seems inevitable, ecl has only itself to blame. For years, it did little to stop pilferage of coal, which is as high as 20 per cent. It argued, wrongly, that the high cess imposed by the state on coal had made its product uncompetitive, forcing the state to halve the levy. In truth, coal is sold at a state-set price which includes the cess. Offtake has rarely been below 85 per cent.
Two, since nationalisation, investment has been just Rs 30 a tonne a year, one third going to welfare and infrastructure. As a result, replacement of machinery and mine development suffered, as did productivity. Even a marginally higher investment could have buoyed production, say experts.
Several expansion plans with foreign assistance backfired. The Rs 96.67-crore Rajmahal Opencast project, in collaboration with the Canadian Commercial Corporation, suffered as a higher capital investment took the average coal-stripping ratio to 1.57 cubic metres per tonne, against 2.6 in indigenous mines. Rajmahal is seen to make a loss of Rs 90 crore this year. The Rs 400-crore Khottadih project, approved in June 1989, did no work till 1992. And then, suspect methods and equipment used caused an accident killing five workers and injuring one.
Three, ecl could never cash in on its unique advantagethe premium-quality Raniganj coal. It is extracted under difficult conditions which add to operating costs, but administered price increases deflect attention from the quality factor.
cil, though, compares the performance of ecl, where 85 per cent of the mines are underground, with others like Northern Coalfieldsanother huge lossmakerwhere most of the mining is opencast. But coal handling projects now operate at 25 per cent of capacity. The lack of parts cripples crores worth of equipment. First-generation computers at collieries are out of order. The burden of a management failure is sought to be passed on to ordinary workers, allege unions.
But workers are no saints either. The cumulative production loss due to labour militancy would amount to hundreds of crores of rupees, says an official. ecl accounts for 30 per cent of the total cil workforce, but 50 per cent of the cil wage bill. Against 556 fatalities through accidents in recent years, around 11,000 next-of-kin were hired, against the norm of one replacement for each victim. The total number of employees taken without reference to vacancies was estimated by the Mishra committee at around 62,000 in cil, 39,000 of them in ecl. Worse, most of the deadweight is in relatively unproductive areas, so that for underground work, there is a definite shortage. A sordid saga of an unholy collusion between the ministry, management and labour, causing the ruin of the mines.