Coal India (CIL) is reworking its land acquisition policy in light of decision of states like Maharashtra to handsomely compensate land losers. This move may drive up the capex of country's near monopoly coal miner as its prepares to acquire 20,000 acre to achieve the 1 billion tonne target.
"We are working with the Hyderabad-based Administrative Staff College of India (ASCI) to redo our existing land acquisition policy in light of the Land Acquisition Act 2013, and particularly on the basis of what the states are doing. Maharashtra is going for 1:4. Likewise, each state would have its own ratios," CIL chairman Sutirtha Bhattacharya said.
Under the 1:4 policy, Maharashtra has decided to compensate land losers to the extent of 4 times the cost of land as decided by the Collector.
"The capex over the next five years to achieve 1 billion tonne production would be around Rs 60,000 crore, but it would depend upon the impact of the land acquisition act. Administrative Staff College is helping us decide on our future path of the roll out land acquisition. The process has to be expedited and the capex plan may change after we assess the impact of the Act within few day's time," Bhattacharya told shareholders during the annual general meeting.
While land acquisition rules might push up its capex, Coal India is trying to bring down costs elsewhere.
Merging closely located mines is one such proposal to bring down costs of development apart from making high-cost applications of large-scale mining technologies feasible. "If we merge mines, we would save land which otherwise would have got utilised to set up dumping grounds for each of the smaller mines," the chairman said.
But Coal India is finding it difficult to get the Board approve its massive investment outlay at one go as it doesn't have any independent director on its Board. "That's why we are only taking the Board approval for capex for a single year though there is an internal decision to invest Rs 60,000 crore," Bhattacharya told reporters.
The NDA government didn't support reappointment of a few independent directors at the previous AGM while the rest resigned apprehending the government's stance. Stock exchanges have sought clarification from Coal India on this and company has replied explaining that it's the responsibility of the government to appoint independent directors. "We are constantly pursuing the appointment of independent directors with the government," said the chairman.
