The company's workers' unions have called country-wide shutdown on 10 October 2011 over their demands for bonus and ex-gratia. “I hope that there will not be any extraordinary increase because after all the company should have the capacity to pay that much,”......
(BSE: 533278 | NSE: COALINDIA | ISIN: INE522F01014)
NC Jha, chairman at Coal India is confident that the offer made to PSU major’s workforce will resolve the ongoing labour unrest. “We are certain that Rs 17,000 bonus will be suffice to avert a union strike,” he said.
The company's workers' unions have called country-wide shutdown on 10 October 2011 over their demands for bonus and ex-gratia. “I hope that there will not be any extraordinary increase because after all the company should have the capacity to pay that much,” Jha hoped adding, “the increase will not be higher what was given in the last two or three wage revision.”
Excerpts from Bazaar on CNBC-TV18 Watch the full show »
Besides, the labour strike, Coal India’s production targets is under stress due to bad weather. However, Jha said, the full year target remains 452 million tonne. “We hope to make up for September quarter shortfall in the third quarter,” he said.
Below is the edited transcript of Jha's interview with Udayan Mukherjee and Mitali Mukherjee of CNBC-TV18. Also watch the accompanying video.
Q: What is the latest on the labour situation because countrywide shutdown has been called on the October 10 – do you think you will be able to avert it by agreeing to some of the demands from the labour unions?
A: Yes they have given a call but then the issue is not that strike should be called its an issue of ex-gratia payment. We have already agreed to pay a certain percentage increase in PAT over last year’s ex-gratia amount. We are going to pay this amount to all the workers. But their demand is so high that we cannot agree to that. They have given a call but with this payment on which we have agreed and are transferring to their accounts, strike we will be averted.
Q: What is the ex-gratia increase that has been agreed to by Coal India?
A: It was 13% over the previous year’s amount of Rs 15,000 which works out to Rs 17,000. We are paying Rs 2,000 more than what was paid last year.
Q: There has been some concerns on Coal India production targets. The Coal Minister indicated that bad weather had indeed impacted production, what are you holding out now as the full year production target for Coal India?
A: My full year target is still 452 million tonnes. For the last two months there have been incessant rains. Ninety percent of our production comes grom open cast mines and whenever there is rainfall the water goes into the pit. This year the rainfall was about 2-3 times more than the previous year, so that led to depressed production during two months. We have a short fall of 20 million tonne from target up to date.
Now that the rains have ceased we are recovering our mines and the production is picking up. Yesterday’s production was up to our expectations. It will take about one week more to come back to normal stage. Hopefully there will not be any rainfall because rainy season is over. We will try to make up for the shortfall due to rains in the next three-four months time.
Q: Eventually you will have to agree on a pay package hike as well for the employees, is there any reason to believe that this time the pay hikes will be much more significant than the previous years because 40% of your production cost is wages, any significant hike will probably dent your margins?
A: This hike takes place every five years and we have had eight such hikes in the last 35 years. The one on which we are working is the ninth one. We have constituted a committee for deciding wages and have had two meetings. I have explained the trade union the issues with the company relating to depressed production and not so high growth. These points have been flagged in the first and the second meeting.
They are also quite sensible people; I hope there will not be any extraordinary increase because the company should have the capacity to pay that. When we discuss further in the next two- three meetings we will come out with an acceptable solution by both the parties. This increase will not be higher than what it was in the last two-three revisions.
Q: There is a cabinet meeting on the Mining Bill as well – any expectations that there will be some tempering on the earlier stance which was 26% profit sharing for companies such as yours?
A: I am not aware about it. But we have already flagged our views about parting so much profit from company's accounts. A fund will have to be created in every district and we don’t have costing district wise. The way of disbursement of this amount is not very clear and that has to be worked out by the ministry. The Land Acquisition Bill also talks of annuity to be given every year to the land losers apart from land compensation rate. The cabinet will have to consider both the bills together, it should not be looked in an isolated manner.
(BSE: 533278 | NSE: COALINDIA | ISIN: INE522F01014)
NC Jha, chairman at Coal India is confident that the offer made to PSU major’s workforce will resolve the ongoing labour unrest. “We are certain that Rs 17,000 bonus will be suffice to avert a union strike,” he said.
The company's workers' unions have called country-wide shutdown on 10 October 2011 over their demands for bonus and ex-gratia. “I hope that there will not be any extraordinary increase because after all the company should have the capacity to pay that much,” Jha hoped adding, “the increase will not be higher what was given in the last two or three wage revision.”
Excerpts from Bazaar on CNBC-TV18 Watch the full show »
Besides, the labour strike, Coal India’s production targets is under stress due to bad weather. However, Jha said, the full year target remains 452 million tonne. “We hope to make up for September quarter shortfall in the third quarter,” he said.
Below is the edited transcript of Jha's interview with Udayan Mukherjee and Mitali Mukherjee of CNBC-TV18. Also watch the accompanying video.
Q: What is the latest on the labour situation because countrywide shutdown has been called on the October 10 – do you think you will be able to avert it by agreeing to some of the demands from the labour unions?
A: Yes they have given a call but then the issue is not that strike should be called its an issue of ex-gratia payment. We have already agreed to pay a certain percentage increase in PAT over last year’s ex-gratia amount. We are going to pay this amount to all the workers. But their demand is so high that we cannot agree to that. They have given a call but with this payment on which we have agreed and are transferring to their accounts, strike we will be averted.
Q: What is the ex-gratia increase that has been agreed to by Coal India?
A: It was 13% over the previous year’s amount of Rs 15,000 which works out to Rs 17,000. We are paying Rs 2,000 more than what was paid last year.
Q: There has been some concerns on Coal India production targets. The Coal Minister indicated that bad weather had indeed impacted production, what are you holding out now as the full year production target for Coal India?
A: My full year target is still 452 million tonnes. For the last two months there have been incessant rains. Ninety percent of our production comes grom open cast mines and whenever there is rainfall the water goes into the pit. This year the rainfall was about 2-3 times more than the previous year, so that led to depressed production during two months. We have a short fall of 20 million tonne from target up to date.
Now that the rains have ceased we are recovering our mines and the production is picking up. Yesterday’s production was up to our expectations. It will take about one week more to come back to normal stage. Hopefully there will not be any rainfall because rainy season is over. We will try to make up for the shortfall due to rains in the next three-four months time.
Q: Eventually you will have to agree on a pay package hike as well for the employees, is there any reason to believe that this time the pay hikes will be much more significant than the previous years because 40% of your production cost is wages, any significant hike will probably dent your margins?
A: This hike takes place every five years and we have had eight such hikes in the last 35 years. The one on which we are working is the ninth one. We have constituted a committee for deciding wages and have had two meetings. I have explained the trade union the issues with the company relating to depressed production and not so high growth. These points have been flagged in the first and the second meeting.
They are also quite sensible people; I hope there will not be any extraordinary increase because the company should have the capacity to pay that. When we discuss further in the next two- three meetings we will come out with an acceptable solution by both the parties. This increase will not be higher than what it was in the last two-three revisions.
Q: There is a cabinet meeting on the Mining Bill as well – any expectations that there will be some tempering on the earlier stance which was 26% profit sharing for companies such as yours?
A: I am not aware about it. But we have already flagged our views about parting so much profit from company's accounts. A fund will have to be created in every district and we don’t have costing district wise. The way of disbursement of this amount is not very clear and that has to be worked out by the ministry. The Land Acquisition Bill also talks of annuity to be given every year to the land losers apart from land compensation rate. The cabinet will have to consider both the bills together, it should not be looked in an isolated manner.
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