P. S. Bhattacharya (left), CMD of Coal India, with other officials in Calcutta on Tuesday. A Telegraph picture

Calcutta, July 10: Coal India Ltd has signed a memorandum of understanding with Transparency International India to put in place transparent mechanisms in procurement and contracting. The pact will also cover its subsidiaries.

Coal India is the second public sector enterprise after the ONGC to adopt such an integrity pact. Steel Authority of India Ltd and Rashtriya Ispat Nigam Ltd are also implementing a transparency policy for their procurement practices.

Coal India and its subsidiaries procure goods and services worth Rs 10,000 crore annually. “There were many complaints relating to our tendering process and delays. The issues of transparency and governance have become a concern, particularly against the backdrop of the huge production target and the kind of procurement to be made during the Eleventh Five-Year Plan,” said P.S. Bhattacharya, chairman and managing director of Coal India. He said many projects were delayed because of complaints and counter-complaints by bidders. This system will cut down such delays, he added.

According to Bhattacharya, the PSU had discussed its tendering processes with the Central Vigilance Commission and arrived at an integrity pact.

“An integrity pact is a tool devised by Transparency International Worldwide to fight corruption in public contracting,” Bhattacharya said.

Coal India has set a production target of 520 million tonnes in the Eleventh Five-Year Plan, up from its existing level of 360 million tonnes.

The company has to procure equipment and machines such as shovels and dumpers to increase production.

“We will implement the transparency system from October 1,” Bhattacharya said, adding that it would be implemented in two phases. “In the first phase, we will identify large procurements that will require approval from the chairman and the board of directors of Coal India, he said.