CIL to rework viability of XI plan projects

New Delhi: Coal India (CIL) has decided to rework the viability of its XI Plan projects and shun those that are not feasible.

The state-run company has asked its consultancy arm CMPDI to finalise how many of the 127 projects, entailing an investment of about Rs 18,000 crore, would be viable in the wake of the increased emoluments and current coal prices, CIL Chairman Mr Partha S Bhattacharyya said.

“We will have to see if the projects which were approved based on the earlier wages of the employees and also those in the pipeline yield at least 12 per cent internal rate of return (IRR) at 85 per cent capacity utilisation,” he said.

The feasibility assessment of CIL's proposed mining projects could raise a question mark on the company's envisaged coal production target (of 520 million tonnes by 2011-12), an industry expert said.

CIL, along with Singareni Collieries Company, had last month signed the eighth coal wage agreement, resulting in a 24 per cent average hike in emoluments of its over four lakh non-executive employees.

The hike would be effective with retrospective effect from June 2006 and CIL will have to bear Rs 8,500 crore as financial liability on account of it in a span of five years ending June 2011.