Coal news and updates

Coal unions to strike on Sept 2 to protest CIL disinvestment

Amid reports that the Union Cabinet might soon take up a proposal for a further 10 per cent stake sale in Coal India Limited (CIL), the labour unions have decided to go on strike on September 2. Apart from the Left-backed unions at the forefront of the strike call, others, including the Bharatiya Janata Party-backed Bharatiya Mazdoor Sangh (BMS), have decided to join the stir to protest the Narendra Modi government’s proposed move.

“We have already started our protest with demonstrations across the country. All the workers’ unions are joining the protest. We will join a nationwide general strike on September 2, and continue with the protests and demonstrations to stop disinvestment,” Jibon Roy, general secretary, All India Coal Workers Federation, affiliated to the Centre of Indian Trade Unions (CITU), said. “The central government is opting for development at the cost of labourers,” he added.

The union claimed there was 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. “In 2011, the unions signed an agreement with the coal ministry on this. Coal is different from all other sectors. The government cannot do this with Coal India. The Narendra Modi government had gone ahead with disinvestment earlier and is doing so again. Workers will fight back,” said Roy.

What could be a major embarrassment for the ruling party is that the BJP-backed BMS too is opposing the move.

“Workers’ interest is our first priority. There has been no talk with the government and, as of now, we are part of the protest and strike,” Surinder Kumar Pandey, president, Akhil Bharatiya Khadan Mazdoor Sangh, affiliated to the BMS, told Business Standard.

For Coal India, a shut down for a day might cost production of 1.5 million tonnes of coal to suffer.

All the five major unions of CIL — Bharatiya Mazdoor Sangh, Indian National Trade Union Congress, All India Trade Union Congress, Centre of Indian Trade Unions, and Hind Mazdoor Sangh — have voiced their opposition against the disinvestment proposal.

CIL and the coal ministry might convene a meeting of the unions to apprise them of the government’s plan and to take them on board.

In 2014-15, the government had sold a 10 per cent stake in the company for Rs 22,600 crore, the single-largest stake sale ever. Now the finance ministry’s disinvestment department has issued a request for proposal (RFP) to engage merchant bankers for divesting the stake through an offer for sale (OFS) route.

The RFP states the government is also considering allotting shares to employees of Coal India at a discount of up to five per cent on the issue price, and up to a maximum of five per cent of the OFS size, after the latter’s completion. At the current price, a 10 per cent stake sale in CIL would fetch about Rs 23,000 crore.

For 2015-16, the budgeted disinvestment target is Rs 69,500 crore, of which Rs 41,000 crore is expected from stake sales in state-owned companies, and Rs 28,500 crore from sale of loss-making public sector units or other unviable assets like warehouses, factories and hotels.

source: http://www.business-standard.com