Government agrees to limit Coal India stake sale to 5%
30 Jul 2013
The government has agreed to halve the size of the stake it would sell in Coal India Ltd to 5 per cent against the originally planned 10 per cent, in a compromise deal with the main trade unions of the state-run coalminer.
"On the advice of trade unions, the government has decided that instead of 10 per cent, we will disinvest 5 per cent," coal minister Sriprakash Jaiswal said.
"For the remaining 5 per cent, the government will come out with a different mechanism. Major trade unions are ready for this," Jaiswal said.
With the workers agreeing to the coal minister's suggestion, the government is now expected to restart the process of inviting bids from bankers and advisers for the planned stake sale.
A report in the Business Standard newspaper today quoted S Q Zama, general secretary of Indian National Mine Workers Federation, affiliated to Indian National Trade Union Congress (INTUC) as saying: ''The minister offered bringing down the stake sale to 5 per cent. We will take a call on the offer after consultations within the five unions.''
Zama is part of the six-member committee set up to talk to the government on the issue. INTUC, which is the trade union arm of the Congress party, is one of the five trade unions that represent over 90 per cent of the 383,000 workforce of CIL.
Other unions include Bharatiya Mazdoor Sangh (BMS), Hind Mazdoor Sabha (HMS) and the left-backed All India Trade Union Congress (AITUC) and Centre for Indian Trade Unions (CITU).
The government was forced to arrive at a compromise after the trade unions threatened to go on an indefinite strike if the sale went ahead.
With Coal India producing almost 80 per cent of India's coal, a strike by the workers would have come as a blow to the energy-starved nation.
The government had, earlier, sold a 10 per cent stake in the world's largest coal miner in 2010, raising $3.4 billion in an initial public offer.
The government was expecting to raise Rs20,000 crore through sale of another 10 per cent stake through an auction on the share market to achieve the Rs40,000 crore current divestment target for the current fiscal.