NEW DELHI: The government is ready to split state monopoly Coal India (CIL) into smaller companies that will compete with each other if experts feel that such a move is good for the country, Coal MinisterShriprakash Jaiswal told ET.
Jaiswal said the government would encourage public-private partnership (PPP) in coal and encourage development of state-owned mines by private firms as this would increase efficiency, boost output and reduce the scope of allegations of misconduct, which have haunted the allocation of coal blocks. He also rejected charges of malpractices and losses in allocating blocks saying that the next auction would determine their true value, not calculations made sitting on an armchair.
He said there was no doubt that the efficiency of the private sector was decisively superior to the public sector, but he was constrained by the requirement of operating in a democracy with a socialist tilt.
The minister acknowledged that there were widespread complaints of arm-twisting of customers by Coal India, but he said this was not surprising for organisations such as Coal India and Railways, which enjoyed a monopolistic position.
"It is natural if you are only supplier and entire country is the buyer. You cannot blame Coal India for that. What is happening in Indian Railways? Only government runs railways and entire nation travels in it.
So, we are not able to get the kind of facilities we should get because there is no other railway. Today, in aviation, if you don't like Air India, you have options. But in sectors you don't have options, you have to create options. The purpose behind block allocation was to change and control Coal India's monopolistic practices," he said.
Jaiswal said sector experts were studying the merits of spinning off Coal India's subsidiaries into independent companies to inject competition in the state-controlled sector. He said he would consider their views with an open mind. Earlier this year, the government had invited consultants to study the structure of Coal India and recommend changes.
"It is on radar. But let the report come and tell us the benefits. We expect the report by December. Many people ask how we want to restructure Coal India. We will restructure it if it is beneficial. That is why we want the report to come first. So many questions are asked if all the subsidiaries should be separated. But we have to see what will be the aftermath and result. It should not fail. Let expert report come. We will take a decision only after that, we will proceed with open mind. There is intention for reform," he said.
In next 20 years, the demand would be so high that coal would become the country's most important sector. "India won't grow without coal until we get a lot of nuclear energy and ample supply of natural gas. There is no other alternative," the minister said.