Partha S Bhattacharyya, the outgoing chairman of Coal India, is probably best described as the man who led the company’s transition from the world’s largest coal miner to the country’s fourth largest company in terms of market capitalisation. As he steps down in February-end, Bhattacharyya shares with Shine Jacob and Ishita Ayan Dutt his views on the future of Coal India and his achievements. But, he is mum on his next assignment, even though he is in race for the post of Haldia Petrochemicals’ managing director. Edited excerpts:
How do you see the road ahead for Coal India? Coal India’s future is extremely bright, not only that, it is going to be the “Gold India”. The firm has consolidated well over the years. Some top-class reforms that we saw in 1990s resulted in withstanding the withdrawal of budgetary support and becoming profitable. It enabled us to access some large loans from agencies such as the World Bank that helped us implement about 24 viable projects.
We have cash reserves of Rs 40,000 crore, a networth of Rs 30,000 crore and a market capitalisation of Rs 200,000 crore.
After the initial public offering, don’t you think the company has to strike a balance between social obligations such as discounting of prices and investor sentiments? There is scope for price rise and that we will certainly do as and when we enter into washeries. When we supply coal of more consistent quality, we will be definitely entitled to a better price. We are happy to provide coal at a lower price to the power sector and hence small discounts will still be there. We will move from something like three per cent washed coal supplies today to 40 per cent by 2017. By then, we would be able to internalise the huge difference between domestic and international prices. In 10 years, a substantial quantity of coal will fetch international prices and manpower will be less than 25 per cent from the current level. So if I say it would be Gold India, nobody can deny that.
With cash reserves of Rs 40,000 crore, why didn’t the company pursue acquisitions more aggressively? Certainly, we can. But at the same time it’s the nation’s money. So, we have to ensure that it’s rightly deployed and will have to follow a process. Rules do not permit me to invest money where I am not supposed to earn a return of at least 12 per cent.
Also, the country does not have proper guidelines for public sector undertakings on this. We have been pleading with the Centre and finally a high-level committee under the prime minister met us. People who acquire properties in the private sector were also there. There we flagged two issues — absence of guidelines and the need for a country approach on acquisitions.
Public-private partnerships are the need of the hour. There are certain things the private sector can do well. They can take faster decisions. You may have to build railway lines, ports and certain other infrastructure where there are resources. In those cases decisions can be taken faster if it’s a PPP. The government has asked the department of public enterprises to frame the guidelines on this. Draft guidelines have already been formed, to the best of my knowledge, and they are in the process of getting finalised.
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What is the status of your overseas ventures now? In Mozambique, we have already got two blocks. Getting the coal evacuated is the only issue there. Meanwhile, we have zeroed in on two properties and both are in advanced stages — one in the United States and the other in Australia. We are zeroing in on valuation and other factors.
How are the environmental issues affecting CIL? The ongoing confusion about ‘go’ and ‘no-go’ areas are affecting us seriously. It was a concept we had suggested because of the huge delay that was taking place in giving clearances. Our point was, we can treat very dense forests as no-go areas, but in return we wanted open-forest proposals to be cleared at a faster pace. That means 40 to 50 per cent of overall blocks will get cleared much faster than what is happening today and it will enable us to increase the rate of production.
What is your take on the Coal Regulatory Bill? We need a regulator because a lot of blocks are given for captive use. This will allow mining to start soon. When coal mining was in private hands, there were a lot of irregularities. There was no unity in technology, conservation, wages, terms and conditions of workers. If the regulator take up these issues, it will serve a great purpose. One thing that the regulator is not required to do is intervene in pricing, because CIL has demonstrated how in a deregulated environment one can price coal in a responsible manner, without losing money.
What’s in store after you step down? Will we see you at the helm of a private company soon? Look, I need to work. May be after a month or so, will take up something. We have a system of getting approval from the government to work up to one year, so I would prefer a job in some sector which is not related to coal at all, where giving approval will be easy for the government. Preferably, in my home state, as I don’t want to take up a transferable job at this point in time. Private or public hardly matters, if the company has a professional approach and the responsibility is to my liking.
