Bid to Privatise NLC through Backdoor

G Sukumaran

OVER the past 40 years, Neyveli Lignite Corporation has continuously secured profit and attained the status of a ‘Navratna’ public sector undertaking due to the untiring hard work of its workers. But, some unscrupulous officials, with the connivance of the private sector and under the patronage of the central government, are trying to open the doors for privatisation.    

The management has handed over the work on removal of overburden to private parties like BGR and Mahalakshmi. A lot of irregularities were found in the handing over of the contract to these parties. This contract will certainly ruin NLC and the company may incur losses in due course. Why is the management suddenly handing over the work on removal of overburden, the material that lies over mining pit, to contractors? Who is the big fish behind this? Who are all going to benefit? These are the questions being raised by the workers and the public. A judicial inquiry into the awarding of the contracts is needed. The central government should come forward to institute an inquiry by the CBI and scrap the contract.

In the early years of Neyveli Lignite Corporation, questions were raised whether it was possible to mine lignite, or brown coal. Then CPI MLA and founder-general secretary of CITU P Ramamurthi visited East Germany and discussed and argued with the engineers and got an assurance that Neyveli lignite can be used for production of electricity. Later, Ramamurthi, along with then Member of Parliament Anandan Nambiar, discussed with the then Prime Minister Jawaharlal Nehru and convinced him for establishment of NLC. It was inaugurated in 1952. Due to the wrong planning of the management, NLC suffered losses till 1975. The wrong planning and strategies of the management were exposed through a booklet, called ‘Noi Kanda Neyveli’ (Disease of Neyveli), written by the then CITU General Secretary K Thiruvengadam. The vital points in the booklet were discussed by the officials and the management was forced to make certain concrete corrections. And from 1975 onwards, the company is earning profit and it is increasing year after year. In 2015-2016, the company has earned a profit of Rs 1,579.68 crore.

In the initial stage, a thermal plant with a capacity of 600 MW, a urea factory, one briquetting and a carbonisation unit were installed. Due to the untiring labour by the workers, NLC is producing nearly 2,990 MW energy in Neyveli alone, using three mines having a capacity of 28.5 million tonnes. NLC has expanded its units in Sirkazhi, Bagur and Tuticorin in Tamil Nadu, 1000 MW unit in Puducherry, 1000MW unit in Kadambur of Uttar Pradesh, and in Bakshingsar in Rajasthan. NLC has been rechristened as NLC India Limited ignoring strong protests.

In Tamil Nadu, a project was envisaged at Sirkazhi for producing 4000 MW by transporting coal from Odisha through Paradip port via Thirumullaivayal. But, unfortunately the project was stalled and the management planned to shift the project to Odisha even though the work was completed for the power station. Because of this decision, more than 40,000 job opportunities were lost. More than 12,000 contract labourers, thousands of young people after completing apprenticeship, the farmers who had given their lands are dreaming of NLC jobs. In the earlier stage, there were more than 21,000 permanent workers but now the workers’ strength has been drastically reduced to 11,000. NLC should have been the gateway of the employment for youths of Tamil Nadu, but only thousands of contract labourers are engaged. When trade union leaders raise this issue, the management’s response is that it is the policy of the Government of India.   

Due to the hard work by the workers, NLC has attained the status of ‘Navratna’ and secured many international and national awards for production. NLC with 50 years of experience in the mining technology has secured a special status internationally. But now due to the improper planning and strategy by the higher officials, the corporation is going to face severe crisis.

The removal of overburden soil and extraction of coal are two main works in the mines. These are carried out by excavators. In the name of cost-cutting, the management has cut down the quantity of usage of diesel for dozer, dumper and pockelien. The production is being reduced due to this sort of ill-planning. Now, the management has handed over the work of overburden removal to private contractors. Earlier, the management played an obstacle role in the overburden removal and said that the work is not proper but now the same management is handing over this work to the contractors, thereby opening the doors for privatisation.

NLC has the capacity of producing 2,990 MW of electricity. To get one tonne of lignite, 5.5 tonnes of overburden is to be removed and to produce one unit of electricity one kg lignite to be used. So, to produce 2,990 MW of electricity daily, around 72,000 tonnes of lignite is required. With the available machines, the workers able to extract more than the required lignite. There is no need for newer machines. All the giant excavators are in good condition and ready for mining activity.

One tonne of lignite extracted from Neyveli is sold for Rs 1,550 and the cost of production is around Rs 1,467. The central government has suddenly increased Green Tax from Rs 100 to Rs 400 per tonne. 68,820 tonnes of lignite are extracted from an acre of mine. For, extraction of lignite in one acre, the government is getting around Rs 2,75,40,000 as Green Tax. This loot has only increased the cost of production. Instead of discussing this with the government, the officials who secured the posts by kickbacks are using this situation to earn what they have given as kickback.

NLC has sold its surplus production to the nearest private 210MW thermal power company, cement factories. In 2015-2016, the corporation has sold 17.16 lakh tonnes of lignite and 43,18,541 tonnes of lignite are lying idle. Because of rise in price of lignite, private cement factories have stopped the purchase. During this period, Tamil Nadu and other states reduced their purchase from NLC, thereby forcing it to reduce the production.

Lakhs of tonnes of lignite which were under the earth after extraction was kept unused for years together, reducing them to ash. But the officials have never bothered about this. At the same time, in October 2015 the management awarded contract for Rs 26,29,74,450 to remove the overburden in mine-2. A similar contract was signed in June 2016 for mine-1.

It is a national loss and criminal act to award contract to remove overburden when the NLC itself is having all the high-end equipment, conveyors and machinery and modern technical experts to take care of such work. The parties who took the contract has no high-end equipment. This process will not help the corporation for production, but the higher officials are insisting on the same process. Thousands of tonnes of diesel get wasted. The use of diesel in dozers and dumpers emanate enormous CO2. This will cause severe pollution problems and lead to various diseases among the workers as well as the people around NLC.

Because of this contract, high-end equipment and machineries are being kept idle, thereby causing heavy losses to the national exchequer. This sort of act by awarding the contract, the officials show the inadequacy of knowledge and experience which leads to the loot of the government and PSU properties.

NLC, which is supposed to be a model employer, flouts all basic principles and rules of the Mines Act and is not giving minimum wages, not implementing safety measures as per the Mines Rule and the workers are treated as slaves. Moreover, the workers are allowed to stay in the mining area with the permission of the NLC management, which is against the Mines Act. The question arises as to why the mining safety inspector is silent on this very basic issue.

The government should scrap the contract which has a lot of discrepancies and take firm action against the erring officials who are involved in the shameful, anti-national act.


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