Colliery Mazdoor Sabha of India (CMSI) recently held an anti-privatisation convention in Asansol in West Bengal. The focus of the convention was to highlight how the Central government was trying to privatise different operations of this industry. The Central government has already sold 37% shares of the public sector Coal India Limited.
Coal production is increasingly being done by private companies. Under the mine revenue-sharing policy, the Central government is handing over active collieries to private companies. The justification given by the government is that many of the subsidiary companies engaged in producing coal, like the Eastern Coalfields Limited (ECL), are loss making and that by involving private players through a “revenue-sharing model”, the finances of these would be improved. However, these claims are hollow since such moves will wreck the finances of the PSU coal producers by transferring more and more of the profitable operations of the PSUs to private companies while the loss-making operations will stay with the PSU.
Workers at the convention pointed out that the revenue-sharing model being used is applicable to 36 coal-mines and allows a private company (Partner Company) to carry out full-fledged mining operation by just paying 4% of its profits as fee. Thus, after the mines are developed by the public sector enterprises using public money, private companies are allowed to operate the ready-made mine infrastructure to make profits and pay next to nothing for the infrastructure development.
Speakers at the convention explained how the public sector undertakings in this sector raised the production of coal to meet the growing requirement of coal for development of the economy. They pointed out that coal production was nationalised between 1971 and 1973 because the private companies producing coal before this were unable to meet the demands of the power and metallurgical sector. Coal production was just 69 million tonnes (MT) at the time of nationalisation, which now stands at 780 MT.
In spite of more than ten-fold increase in production, the ECL management has been cutting down on the number of permanent workers. Through various schemes, mining work is being carried out by migrant laborers managed by contractors. In the 1990s, ECL alone employed 1,82,000 permanent workers, which has come down to only 52,000. In order to keep the production at its capacity, ECL has to outsource production to “partner companies” who employ contract workers. The workers in these companies are made to work for 12 hours and at meagre wages without adequate safety precautions and without any benefits. ECL has outsourced 33 projects.
The Central government is responsible for the financial sickness of the PSUs in the coal sector. For a very long time the maintenance of old underground mines has been neglected. This neglect has led to many underground mines becoming unusable.
Another important reason for coal sector becoming loss making has been that the financial resources of the coal PSUs have been drained by the bureaucracy which manages these PSUs. Hefty fees and royalties have been paid to foreign collaborations and consultants. Worker have pointed out that many of these foreign consultants lack the knowledge of the ground reality in India. This has led to purchase of expensive imported equipment and changes to mining operations which had to be abandoned within a short period of time. Even though these projects did not serve their purpose, 1000s of crores of Rupees had to be paid. Implementation of some of their recommendations has even led to accidents and consequent loss of life and revenue. Yet, these consultants have never been held accountable.
Coal mining has been opened up to private companies since the 1990s. Coal mining is permitted to large users of coal. In 1992, the central government decided to incorporate private organisations in the production of electricity. The nationalisation act of 1973 was amended to enable the government to grant captive mines to the private sector at will. Private production of cement was added to the list in March 1996. The captive mines of the private companies in power, steel, cement and other energy intensive sectors have deprived the PSUs of the more profitable mines. While the defunct and less profitable underground coal mines remain with the PSUs, the open coal mines where coal can be extracted with far smaller costs are being handed over to the private companies.
Coal workers are justified in their agitation against the anti-social and anti-worker privatisation measures of the government.