Amidst government directive to PSUs to invest their surplus funds, Coal India Ltd, which is sitting on a huge cash-pile, has lined up Rs 50,000 crore investment plans for the next five years. “We have a five-year plan, almost Rs 50,000 crore lined up to be invested,” Coal India chairman and managing director S Narsing Rao informed.
Earlier, finance minister, P Chidambaram said that government had already put PSUs on notice and no state-run firm would be allowed to fall short of the announced intention to invest. “If they (PSUs) have not invested and they still have surplus cash, they have been told to invest...The principle is use it or lose it," the finance minister had said.
Rao said the PSU was sitting on a cash reserve of Rs 61,000 crore. “We don’t have plans for the entire money. (It is) not possible to front load, because some of them are conditional...Like we have lined up Rs 7,500 crore for railway connectivity,” he added.
Battling low production, Coal India (CIL) has earmarked a sum of Rs 24,500 crore as capital expenditure, out of Rs 50,000 crore envisaged investment, over the next five years mainly to boost capacity. The Rs 24,500 crore would be spent mainly on developing more than 100 underground and opencast mines in seven coal producing subsidiaries in the 12th Five Year Plan (2012-17).
CIL accounts for over 80% of the domestic coal production also plans to set up 22 new washeries. World’s biggest coal miner, CIL is also eyeing acquisition of assets abroad. “Something we are pursuing in South Africa. It has not reached at that stage, so it’s too early to say,” Rao commented. Coal India has planned to undertake a conditional investment of Rs 7,500 crore on augmenting rail infrastructure. “We plan to spend Rs 7,500 crore on rail infrastructure provided the Railways complete the project on time,” Rao had said earlier.
On plans of CIL quitting International Coal Ventures Private Limited (ICVL), a special purpose vehicle formed by five PSUs to acquire assets abroad, Rao said a final decision on this would be taken by the PSU board, which is about to meet shortly. He clarified that the PSU already has its overseas acquisition wing - Coal Videsh.
Chidambaram also said the performance of CMDs of state-run firms would be measured, among other things, on how much their company has invested in terms of the declared intention and at the beginning of the financial year, each central PSUs had committed to invest certain amount. At present, about 25 central PSUs, including blue-chip companies like ONGC, GAIL, NTPC, SAIL and BHEL have surplus funds worth Rs 2.5 lakh crore.
Coal-linkage to be solved in two years: BHEL
The coal linkage issue, which was a reason for shrinking of the market, will be sorted out within two years, Bhel CMD, B Prasada Rao said. "We are sure the government is looking at it and are hopeful that issues will get sorted out within a couple of years. It is only an internal issue with certain policy decisions taken. The linkage made available for thermal power plants will be much more accessible in the years to come. We are optimistic that things will improve," he said.
In the meantime, Bhel was embarking on a strategic plan to improve their business, he said. Instead of getting contractual orders for boilers and other equipments for power plant, Bhel is looking at EPC model namely Engineering, Procurement and Construction commissioning capability thus enlarging scope of offer in Power Sector. Bhel had already entered into a joint venture with NTPC by creating a manufacturing base for certain power plant equipments. The public sector was also entering into smaller business areas like transportation, transmission and renewable energy which will get more attention so as to maintain a balanced portfolio, he said.
Bhel is also working with GE India to offer water management solutions for the power sector, Rao said. In transportation segment, the production capacity at Bhel's own plant at Jhansi is being enhanced to 75 locomotives per year as against 50 units. Next year, it will almost be doubled to churn out 100 locomotives, Rao said. With 20-30 cities going in for metro rail system in the future, Bhel has inked a tie-up with Japanese- major Hitachi to roll out metro rail vehicles. Bhel will be investing substantial amount to create facilities for controls and instrumentation systems development in Bangalore, for traction motors in Bhopal and construction of coaches and locos in Jhansi.
Rao said that Bhel was on track for an investment of Rs 1,000 crore, almost equally shared by transmission, transport and renewable energy segments. Earlier, Rao said that adherence to quality will be the mantra for the future as the market conditions globally and in India are witnessing a slowdown, specifically in Power sector.
Earlier, finance minister, P Chidambaram said that government had already put PSUs on notice and no state-run firm would be allowed to fall short of the announced intention to invest. “If they (PSUs) have not invested and they still have surplus cash, they have been told to invest...The principle is use it or lose it," the finance minister had said.
Rao said the PSU was sitting on a cash reserve of Rs 61,000 crore. “We don’t have plans for the entire money. (It is) not possible to front load, because some of them are conditional...Like we have lined up Rs 7,500 crore for railway connectivity,” he added.
Battling low production, Coal India (CIL) has earmarked a sum of Rs 24,500 crore as capital expenditure, out of Rs 50,000 crore envisaged investment, over the next five years mainly to boost capacity. The Rs 24,500 crore would be spent mainly on developing more than 100 underground and opencast mines in seven coal producing subsidiaries in the 12th Five Year Plan (2012-17).
CIL accounts for over 80% of the domestic coal production also plans to set up 22 new washeries. World’s biggest coal miner, CIL is also eyeing acquisition of assets abroad. “Something we are pursuing in South Africa. It has not reached at that stage, so it’s too early to say,” Rao commented. Coal India has planned to undertake a conditional investment of Rs 7,500 crore on augmenting rail infrastructure. “We plan to spend Rs 7,500 crore on rail infrastructure provided the Railways complete the project on time,” Rao had said earlier.
On plans of CIL quitting International Coal Ventures Private Limited (ICVL), a special purpose vehicle formed by five PSUs to acquire assets abroad, Rao said a final decision on this would be taken by the PSU board, which is about to meet shortly. He clarified that the PSU already has its overseas acquisition wing - Coal Videsh.
Chidambaram also said the performance of CMDs of state-run firms would be measured, among other things, on how much their company has invested in terms of the declared intention and at the beginning of the financial year, each central PSUs had committed to invest certain amount. At present, about 25 central PSUs, including blue-chip companies like ONGC, GAIL, NTPC, SAIL and BHEL have surplus funds worth Rs 2.5 lakh crore.
Coal-linkage to be solved in two years: BHEL
The coal linkage issue, which was a reason for shrinking of the market, will be sorted out within two years, Bhel CMD, B Prasada Rao said. "We are sure the government is looking at it and are hopeful that issues will get sorted out within a couple of years. It is only an internal issue with certain policy decisions taken. The linkage made available for thermal power plants will be much more accessible in the years to come. We are optimistic that things will improve," he said.
In the meantime, Bhel was embarking on a strategic plan to improve their business, he said. Instead of getting contractual orders for boilers and other equipments for power plant, Bhel is looking at EPC model namely Engineering, Procurement and Construction commissioning capability thus enlarging scope of offer in Power Sector. Bhel had already entered into a joint venture with NTPC by creating a manufacturing base for certain power plant equipments. The public sector was also entering into smaller business areas like transportation, transmission and renewable energy which will get more attention so as to maintain a balanced portfolio, he said.
Bhel is also working with GE India to offer water management solutions for the power sector, Rao said. In transportation segment, the production capacity at Bhel's own plant at Jhansi is being enhanced to 75 locomotives per year as against 50 units. Next year, it will almost be doubled to churn out 100 locomotives, Rao said. With 20-30 cities going in for metro rail system in the future, Bhel has inked a tie-up with Japanese- major Hitachi to roll out metro rail vehicles. Bhel will be investing substantial amount to create facilities for controls and instrumentation systems development in Bangalore, for traction motors in Bhopal and construction of coaches and locos in Jhansi.
Rao said that Bhel was on track for an investment of Rs 1,000 crore, almost equally shared by transmission, transport and renewable energy segments. Earlier, Rao said that adherence to quality will be the mantra for the future as the market conditions globally and in India are witnessing a slowdown, specifically in Power sector.
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