Privatisation: Will Coal India Ltd (CIL) subsidiaries be privatised?

• At a time when the government is trying to bring in more players into the sector, it makes better sense to hive off CIL subsidiaries into separate entities, said a source
• The Coal Ministry has reached out to Coal India Ltd, proposing the listing of its consultancy arm CMPDIL on the bourses and the divestment of its 10 percent paid-up capital

New Delhi: With news of the Ministry of Coal reaching out to Coal India Ltd (CIL) with a proposal to disinvest 10 percent stake in Central Mine Planning and Design Institute (CMPDIL) and list the company on the bourses, speculation is rife about whether the government may consider the privatisation of CIL subsidiaries. According to three separate sources in the know of such matters, the government for now is not considering any such plan.

"There's no such plan being considered at the moment by the government. The proposal to hive off CMPDIL is being considered because it makes better economic sense. CMPDIL is a consultancy and why should its horizons not be widened? It will make better economic sense for CMPDIL if it is hived off into a separate entity and is allowed to render its services to both public and private sector," a top government official told PSU Watch on the condition of anonymity.

'Privatisation of CIL subsidiaries may not be the best way forward'

Another government official in the Coal Ministry said that the privatisation of CIL subsidiaries is unlikely because it may not be the best way forward at a time when the government is trying to increase competition in the mining sector. "At a time when the government is trying to bring in more players into the sector, it makes better sense to hive off CIL subsidiaries into separate entities than to privatise them," said the source.

A third source in the Ministry of Finance said categorically that no such proposal is being considered by the government currently.

CMPDIL listing

PSU Watch had earlier reported that the Ministry of Coal has reached out to Coal India Ltd, proposing the listing of its consultancy arm CMPDIL on the bourses and the disinvestment of its 10 percent paid-up capital. The ministry has sent a letter to CIL for taking necessary actions, has asked CIL to take up the issue with its Board of Directors. One of the sources quoted above said that the proposal is only an idea floated by the government and a final call on the matter will be taken by the CIL board.

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