We will Foray into Power Generation

Says Animesh Nandan Sahay, CMD, Mahanadi Coalfields

Please tell us about Mahanadi Coalfields Ltd (MCL). How did the company come into being?

Mahanadi Coalfields Limited was carved out of South Eastern Coalfields Limited in 1992 with its headquarter at Sambalpur. It has its coal mines spread across Odisha, including seven open cast mines and three underground mines under its fold. In 1992 we started our operations, so now the company is about 21 years old. When we started, our coal production was 23 million tonnes and last year we produced 108 million tonnes. So there has been consistent growth in last 21 years. In fact, we have been producing more than 100 million tonnes, since 2009-10. This year we hope to do better. We have two coal fields- Talcher and IB valley coal fields. Our future programme is ambitious and we will triple our production to 350 million tonnes the next 15-20 years. I don’t see any technical problem, except for the clearance problems. If the clearances are available in time and land issues are sorted out amicably, than I don’t see any problem in achieving 350 million tonnes coal production. Infrastructure, that is to say evacuation part, is also very important. We are opening new coal fields in different areas of the state.

In your opinion what are the key initiatives that have allowed MCL to grow consistently over the years?
MCL’s main operations are open cast, so mechanisation is possible. For that reason, growth is faster. While the quality of the coal may not be that good, we are making it up with quantity. We are in fact constrained by infrastructure; getting land is a big problem, especially forest land. Most of the land that we have is either coal bearing, which means that we can’t have infrastructure on that land, or it is the forest land. Another problem is that there are more than 400 villages around the coal mines. Shifting the village population is a major problem. Where do we shift them? We can easily triple our production in next 10 years if infrastructure and land related issues are resolved, but that is difficult; so we will take around 15-20 years for achieving this goal. I would also like to tell you that in Odhisa, we are the only company to have opened new mines consistently and to have expanded effectively. When I came here in 2011, there was a mine called Bhubuneswari, which used to produce only 3 million tonnes of coal. But this year, if we get environmental clearance, this mine will produce 25 million tonnes.

“We aim to enter into a joint venture with the Odisha government in power transmission. We already have some assets earmarked for us”


Where do you expect to see the company in future? Tell us about your vision for MCL and the coal industry in India.
Our core business will be coal mining, but we also want to be energy providers. We want to go for power generation. We also want to enter into a joint venture with the Odisha government in power transmission. We already have some assets earmarked for it. So, we will be in power generation and transmission. Apart from these, we are in talks with Paradip Port authority to take over some of their berths. They have already agreed to give us these facilities on a nominal basis. In railways, we own a 52 km line in Jhasuguda. We are investing Rs 1000 crore for developing it. Once developed, it will be completely our own and will increase coal production in Vasundhara. We also want to develop another line from Vasundhara to Nagpur. Meanwhile, we are also looking to change the internal transportation of coal through silos. In a nutshell, our future priority is power generation, transmission and also having our own berth in a port.

Elaborate us about your eoperational initiatives?
Use of ICT in governance is increasing. We at Mahanadi Coalfields have successfully implemented the e-auctioning and e-procurement processes. Our e-procurement service was started in 2009 on an e-portal designed by National Informatics Centre, Chennai. The system has achieved positive operational results.
The tenders submitted through the e-auctioning process are auto-evaluated. This has eased the application, submission and updating information about tender status. The system allows a person Andaman and Nicobar to apply and submit bids. We further implemented the auto-refunding system to address the refunding issues of bidders. This has eased the refunding of Earnest Money Deposit (EMD), which is executed within 24 hours. It was implemented in October 2013 as a pilot-project is now fully operational. Till 15th January this year, we have refunded Rs18.8 lakhs and 164 unsuccessful bidders were registered.

How have these e-initiatives benefited Mahanadi Coalfields?
Tenders worth Rs 2 lakh and above come under the e-tendering process. The e-tendering system has reduced the cost of bidding; it now the costs Rs30/bidder compared to the earlier cost of Rs 2,000 or more. Along with reduction in bidding and transaction costs, the process allows complete transparency in the process. As all tenders and their respective details are available online, a bidder can track the status of his submitted tender. The system also makes the bidding process flexible, wherein the bidder can make changes in the tender till the last minute. However, no changes are acceptable once the tenders are closed. E-procurement has brought down the validity of global tenders from 180 days to 90 days and of domestic tenders from 120 days to 75 days. It also helped reduce unethical practices by bidders during the tender process. The security of these portals are strictly regulated and monitored by three security agencies.
We have also utilized ICT technologies for coal weighing. We currently have 40 inmotion road weighbridges equipped with Road Frequency Identification (RFID). The system allows to acquire accurate on-line production data.

Have you incorporated such technology driven facilities for fleet management?
Our Operator Independent Truck Dispatch System (OITDS) has brought in transparency in our three mining areas, especially in Over Burden (OB) removal process. The process has brought in a positive benefit in reducing the overtime hours by 5-10 percent. We have installed GPS-enabled vehicle tracking systems in our trucks, particularly those handling transportation of drinking water to remote villages during summers. We will be soon deploying such GPS and GPRS trackers even in our coal tippers carrying coal, wherein the system can monitor and control coal thefts.

The coal sector is generally considered a very hard area for employees. What facilities are available to MCL employees?
We believe in providing the best possible care to our employees. Once they join MCL, their lives are completely taken care of. Even the lowest employee earns more than Rs 20,000 per month. We also provide complete medical coverage to all employees’ family members, including parents, if they are dependent on them. We didn’t even blink while giving Rs 10 lakh for hip replacement for the father of our employee. We have access to good hospitals, dispensaries and trained doctors. We also provide living quarters to our employees. Currently, we are building new living quarters. We have a liberal policy for giving jobs to land giver. Odisha government’s R&R policy says that as lands are fragmented and there are many owners for a patch of land, jobs must be given to all. So, people in the state know that if MCL takes their land, their interests will always be safeguarded. We give around 70-80 crores for a village. This is very liberal and lucrative. Like once I got a letter, written by 2 villagers, demanding that if we don’t start measurement of their houses and pay them compensation, they will sit in hunger strike. Problem is, there are many in a village who do not own lands. We cannot not give them a job, as the policy says job for land.

“The tenders submitted through the e-auctioning process are auto-evaluated. The process has brought in ease in applying, submission
and knowing updated information about the status of the tenders”

How does MCL get the funding for providing these benefits to the employees?
We generate funds through our own means. We are the highest tax payer in Odisha. Last year we paid around Rs 2,000 crore as tax out of our Rs 6,400 crores profit. We paid around Rs 1,200 crores as royalties, apart from entry tax and other taxes. It all goes to the state. We also spend Rs 100 crores on CSR related activities. We spend on sports as well ; we often organise hockey tournaments. Last year, we supported a girl who plays chess. We gave her one lakh and she is now a world under-10 champion.

Odisha still has lot of scope in human development, citizencentric service delivery areas. How can MCL contribute here?
It is all about to change. All over Odisha and in India, you have the dengue scare. But you will not find it in our areas. To improve the quality of education, we fund nine DAV schools. We also give aid to other schools. Last year, one of our DAV schools was judged to second position in India in CBSE. We are doing wonderful job in education, and it is showing results. Since coal is located here, many industries are setting up their facilities here. This leads to more employment generation and more prosperity.

How important is IT integration for MCL to be working in transparent and effective manner?
It is extremely important. Actually, we have been slow in using the best IT systems. About 15 years back, we did not recruit in this field. Then we picked up. IT brings in transparency; you cannot fudge numbers. In last 3-4 years, this trend has changed. Now you know exactly what is happening. We are trying to curb thefts with the help of IT – Geo-fencing, GPS based trucks, etc. . E-procurement is also important. In the beginning, we had glitches, but those are sorted now. Things are picking pace. Now we work through out website instead of spending crores on advertisements.

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