Creating wealth for well-being

Dr Sarat Kumar Acharya, CMD, has transformed NLCIL from a company engaged in the business of lignite mining and lignite-based power generation to a total energy conglomerate with pan-India presence

A business expert, an able administrator and a good Samaritan rolled into one, that is how Dr Sarat Kumar Acharya, Chairman and Managing Director of NLC India Ltd is described by the people and corporate world. What makes him unique is his role in turning around Neyveli Lignite Corporation, a public sector Navratna company down south in Neyveli, Tamil Nadu from a company engaged in the business of lignite mining and lignite based power generation to a total energy conglomerate with PAN India presence.

He himself describes NLC India Ltd, which was started in 1956, as a 61-year young company. Since he assumed the role of Chairman and Managing Director, NLC India has strode into areas hitherto untried and unexplored by this public sector entity and that too with impressive performance, unparallel in a public sector history.

The NLC, which was generating 2,740 MW thermal power with 30.6 MTPA of lignite mining capacity and 11 MTPA of coal mining installed capacity as on March end 2015 has now improved its power generating capacity to 5240 MW with mining capacity of 39.15MTPA in lignite and 31 MTPA coal as on March 31, registering a growth of 91 per cent on power side and 69 per cent on mining side. With all eyes set on the big league, the company hopes to increase its output to 16,491 MW through a bouquet of thermal, solar and wind power by 2022 and 21,011 MW by 2025 with fuel sufficiency coming from its own mines, lignite and coal.

No wonder, Piyush Goyal, the Union Minister in charge of Coal and Railways, himself complimented Dr Acharya as well as the NLC India Ltd for the outstanding performance churned out silently but steadily during last three years, stating it as an unsung story.

What is important is that being a PSU subject to bureaucratic controls and regulations, it has scaled landmark achievements in a very short span of time. Dr Acharya says it is because of his human resource engineering, he could manage all the stakeholders to help him to make NLC India what it is today. We also got an empowering environment and encouragement from the Administrative Ministry and from the industry friendly policies of the new Government, he adds. In a free-wheeling interview with Team Pioneer, Dr. Acharya opened up and recounted the hitherto little known growth saga of NLC India.

Could you describe how NLC India Ltd reached the present position with a pan-India footprint in spite of alleged hurdles caused by politicians, trade unions, local and locational complexities?

What you are seeing is the result of strong business acumen in work coupled with human resource engineering mobilising goodwill, help and positive participation of all stakeholders. This company was born in 1956 pioneering the core business activities of lignite mining and lignite based power generation. NTPC, the mega power giant of India today, was launched in 1975. There was a time when NTPC engineers and technicians used to come to Neyveli to learn the skill of power production. But our own experts here did not try to expand or grow beyond this remote place Neyveli breaking their comfort zone. What I understand is that our people were quite happy with whatever they were getting. The salary was good. Working environment was excellent and the company had provided best houses and other facilities to them. People were content with whatever they got and there was hardly any urging ambition to expand, diversify and grow beyond. Their enormous potential was not harnessed and hence there was hardly any progress.

The first major break came in 2010 when NLC commissioned a lignite based power plant of 250 MW at Barsingsar, Rajasthan with a 2.1 MTPA lignite mine there. Then, in the year 2015 only it commissioned its first 1000 MW coal based power plant at Tuticorin, TN and its 10 MW Solar Plant in Neyveli. Practically, the transition of Neyveli Lignite Corporation to NLC India Ltd happened in a big way during last three years since 2015. From an enterprise, which was limited only in lignite mining and lignite based power generation restricted to Neyveli, it made its entry to coal mining, coal based power generation, generation of power from renewable sources like wind and solar and power trading in a big way.

 In October 2015, I went to the board with a detailed road map Vision 2025 for producing 21,000 MW by 2025 all by ourselves with our fuel source from our own mines. With our basic strength as miners and expertise in power generation, we laid our plan for diversification across the energy value chain.

As a miner and power generator, we create wealth, earn profits through fair means and at the same time we keep consumers’ interest uppermost in mind. Registered as a power generator using lignite from our captive mines in the same State, the roll out of Goods and Services Tax brought in a gain for our company as clean energy/compensatory cess of Rs 400 per ton was no more applicable. Accordingly, we passed on this benefit to our consumers to a tune of around Rs 630 crores total for all user DISCOMS in the south and Rajasthan and also from April, we have further reduced our power tariff ranging from 10 paise to 17 paise per KwH which will give a benefit of around Rs 200 crore to consumers. This we could do by reducing cost with prudent cost management.

We had problems like staff over burden because of closure of the fertilizer branch the NLC had earlier. But we have not retrenched anybody but have been able to utilise them optimally by redeploying and streamlining the staff structure through selective addition against large number of superannuations, VRS and utilisation against expansion project. Coming to the work process, we aim at both speed and accuracy and do things in continuous mode. All these have given us tremendous results in productivity enhancing value addition per employee every year.

How did you manage to get approval for mega projects in record time and start the works?

We complete our environment, market study and back hand works much earlier and keep everything ready for the next stage of work. We work in a parallel manner instead of working in a sequential style. If you believe efficiency is the hallmark of private sector, then we work much better than the private sector. I never kept any issue pending and I work 24X7 to resolve all issues and I also encourage all my colleagues to be proactive, responsive and to faster the speed of progress. Project clearances were facilitated through sincere boundary management and encouraging help in Government corridors.

 The 2015, 32 days strike by workers, how did it affect the company and how did you handle it?

Here in Neyveli, there was no central union of a good stature. The trade unions are controlled mainly by the ruling party in the State Government and local outfits. These local leaders and politicians used to pressurise the management even for non-issues. This company, in spite of its good works, was getting plagued by strikes very often. When I was about to be appointed as the CMD in 2015, I had to face a 32 days strike by around 11,000 workers demanding unreasonably high wage. All my colleagues in executive and supervisory cadre stood solidly to face the unjustified strike and contract workers also joined in for work. During the entire period of strike all the normal operations of mines and power stations were carried out unaffected. The strike was declared illegal and errant leaders were handled with strong disciplinary measures.

 In the meanwhile, the State leadership had written to Prime Minister’s office alleging that NLC as a profit-making company was not fulfilling the demands of its workers. We submitted to the Government that NLC workers were already best paid in the industry and the company could not afford to succumb their unreasonable demands. We also stated that being under the Ministry of Coal, we could not go beyond the norms and practices to give unreasonable hikes which may result in backlash in Coal India and also among the executive community, besides going beyond the company’s affordability.

To discipline the errants, during the ongoing strike which turned unruly one day, we had to resort to summary dismissal of 11 workers. During that unruly day, many vehicles belonging to the company executives were damaged by some workers. We ensured that the expenses incurred in repairing the vehicles were ultimately made good by recovering the same from Union contributions. The strike was called off on the 32nd day and finally the agitating workers realised the futility of the strike and agreed to accept the settlement well within the industry norms. During this period, a long-standing wrong practice of giving paid C.Off of 36 days in a year to each worker was completely stopped with iron hands and as a part of settlement, performance linkage for promotion of workmen was brought in. What was the outcome of this agitation was that for the first time in NLC, strict discipline was enforced and wage revision demand was settled within the ambit of the industry norms  breaking the legacy of giving in to union and  poitical pressures.

Could you elaborate on the growth plans of NLC India?

As told already, as a 60-year-old company, it had a lignite-based power generating capacity of 2740 MW and lignite mining capacity of 30.6 MTPA. Now over three years, this company has grown to have a total power generating capacity of 5,531 MW of which 4,240 MW is from lignite, 1,000 MW from coal and 291 MW from renewable sources of solar and wind. It is poised to add 400 MW solar and 1000 MW lignite-based thermal power generating capacity by July 2018. Further works are going on ground for adding 709 MW solar power capacity by March 2019 and 6000 MW coal based power generating capacity in Kanpur, UP and Talabira, Odisha by 2022 and by commissioning around 88.6 MTPA mining capacity ( coal and lignite) by that time. The Vision Document 2025, which I took to the Board when I took over as CMD in October 2015, is getting translated into reality as above and in all likelihood, this company will emerge as a 21,000 + MW energy major with a total mining capacity of 113.15 MTPA (coal and lignite) by 2025 with its all India presence in power generation, mining, power trading and commercial coal mining.

This vision is not my vision, restricted to me or to my Board. This is a shared vision of all 14,000 employees of this company with whom I interact and share my views regularly over various media and the Team NLC is geared to achieve many exciting things to scale newer heights in our business.

 Our plans for going super critical and ultra super critical power plants with unit capacity from 660 MW to 800 MW have been chalked out with 2 x 660 MW = 1320 MW happening now in Neyveli complex and 4 x 800 MW = 3,200 MW coming up at Talabira complex in Odisha. We are into a big time for commercial coal mining businesses that we are venturing into. As a part of our expanding renewable business, apart from generating solar and wind power in a big way, we will soon set up battery charging stations along the national highways in Tamil Nadu and in other parts of the country and exploring the possibility of supplying lignite to south based power stations for blending with coal to supplement the primary fuel requirement by 10 per cent. We have a plan to extract sand from our mined overburden on commercial scale and also have plans for using lignite as a substitute for coking coal for making steel.

We believe in responsible mining, clean power generation addressing environmental and ecological concerns and doing good for the society and wellbeing of humanity with the wealth we create as a corporate citizen of India, Dr Acharya sums up.