Troubled times

New Delhi, May 8: Bharat Coking Coal Ltd (BCCL) has been pulled up by the Comptroller and Auditor-General of India (CAG) for setting up the Rs 194-crore Madhuband washery. The CAG feels that the new washery was not required since BCCL was not producing enough coal to fully utilise the capacities of the existing ones.

The latest CAG report said the average capacity utilisation of the washery was only 22.5 per cent and it sustained a loss of Rs 127 crore during the five years ended March 31, 2004.

According to the report, BCCL is running 49 coking coal mines with a production capacity of 8.77 million and has as many as 10 washeries that can wash 15.13 million tonnes of raw coal per annum. The washeries are required for the benficiation of coking coal before it can be used in steel plants.

The report said when the proposal for setting up the 2.5-million-tonne Madhuband washery came up in the mid-eighties, the supply of raw coking coal to the seven washeries was only 7.65 million tonnes against the washing capacity of 11.52 million tonnes per annum.

Although BCCL claims to have brought the latest technology for the Madhuband washery, Steel Authority of India Ltd (SAIL) refused to accept the washed coal from the unit due to its ?inferior coking property?.

In an attempt to utilise the washery capacity, BCCL then switched over to washing non-coking coal in June 2003 for supplying ?washed power coal? to power houses.

The management went ahead with this decision despite the fact that the ministry of coal had rejected the proposal in February 2002 on the ground that utilising the advanced technology of the Madhuband washery for washing non-coking coal would be a waste. It had clearly stated that this was ?not in national interest?.

The BCCL decision to go ahead with washing non-coking coal plunged it headlong into the red.

The conversion proposal was approved by the BCCL board in August 2003 envisaging a 79 per cent yield of washed power coal, which was projected to earn a profit of Rs 1.85 crore per year at 65 per cent capacity utilisation. However, it was found that the capacity utilisation of the washery in power coal was only 23.5 per cent and it suffered a loss of Rs 25.1 crore in 2003-04.