New Delhi: Employees at state-run Coal India subsidiary BCCL (Bharat Coking Coal Limited) are still waiting for April salaries to be credited to their accounts and have raised an alarm because the finances of the company have reached a precarious position, plunging BCCL into a financial crisis. An association of serving and retired executives at the Maharatna company, AIACE (All India Association of Coal Executives) has written a letter to Minister for Coal Pralhad Joshi and sought his intervention in the matter and has demanded a package for the Coal India subsidiary.
In the letter dated May 17 accessed by PSU Watch, the AIACE has told the minister that BCCL has been struggling for fund salaries to its 42,000 employees due to non-payment/part payment from customers in the last few weeks. "Under the circumstances, it is requested to help create a sustainable recovery method so that the central government finds itself in a position to help these affected PSUs to come out of woods, the association said seeking a suitable package for BCCL's recovery," the letter said.
As per rough estimate, BCCL usually receives around Rs 1,000 crore from customers every month, out of which it spends Rs 450 crore on salaries, and another Rs 450 crore on levies and input costs.
The total dues from power companies have crossed Rs 3,200 crore, one of the highest among subsidiaries, due to liquidity crisis faced by electricity generators during the lockdown, plunging BCCL into a financial crisis. The entire working capital has been spent on producing and supplying coal to state-owned customers on credit, the letter said.
In March, the company managed to pay salaries and continued production in April by raising finances against its bank fixed deposits, the limit for which has been exhausted. BCCL's major customers refused to settle past dues, citing tight liquidity position, the letter said.
Power companies are also not acknowledging invoices raised recently, as executives are unavailable due to the Coronavirus lockdown, the letter said and added that this is acting as an impediment to raising additional working capital through invoice discounting from banks. The situation started deteriorating from mid-March when payments from BCCL's major customers Damodar Valley Corporation (DVC) and West Bengal Power Development Corporation (WBPDCL) fell to a trickle.
"It is to mention here that these two constitute more than 80 percent of BCCL sales. In March, they paid only a small portion of their dues, while in April, both these companies did not settle the bill despite repeated requests," AIACE said.