Diesel prices fuel strike plan in coal PSUs

Nagpur: Just out of the coal shortage crisis, Western Coalfields Limited (WCL) and other mining PSUs under Coal India Limited (CIL) have been now threatened by contractors of going on an indefinite strike.
The contractors are engaged in overburden excavation, which means clearing of earth till coal is struck. They claim that the steep hike in diesel prices make it no longer viable to continue work under the old terms and conditions of the tenders.
A likely strike is expected to take major toll on coal production.
The Association of Hiring of Equipment Contractors has served a notice at the WCL chairman-cum-managing director’s office intimating the plan to go on strike from November 1, if its demands are not met.
Sources in the association said similar notices have also been sent to other CIL subsidiaries.
According to the tender conditions, the escalation clause covers up to 30% hike in diesel prices during the contact tenure, say contractors. However, the diesel rates have gone up by over 70% in a year now, eating into their margins. The problem is worse in WCL due to high stripping ratio as compared to other CIL arms. In other words, more earth has to be dug for reaching coal deposits in the mines in Central India.
Explaining the arithmetic, a source said now as the diesel rates have crossed Rs100 a litre, contractors are burning fuel worth Rs50 to remove one cubic metre of earth. As against this, they are getting only Rs28.68. According to the calculations put up by the association, contractors are losing as much as Rs2.13 crore in a day due to the diesel price hikes.
A meeting of contractors has been planned on October 25, during which further planning of the strike would be discussed. A meeting with the WCL management has also been planned on the same day. “If there is no respite, we would certainly go ahead with the strike,” said a contractor.
Contractors said as much as 80% of overburden removing is done by private parties, whose equipment is hired by the coal PSUs. This is the basic process in mining coal. Due to the geological conditions in Vidarbha, the stripping ratio is rather high. As much as 10 cubic metres of earth has to be removed to get a single cubic metre of coal, they pointed out.
“The payment terms are too tough. Half of the dues are cleared when the entire quantity of overburden is removed, finally touching the coal seam. In WCL, the process takes longer due to the high stripping ratio,” explained a contractor.
A senior official in WCL confirmed that a notice was received from the contractors’ association and the management will have to discuss the matter with them. Their demands cannot be totally wrong considering the current situation, said the source.
Transporters get 19% freight hike after stir
The transporters’ strike against cement companies for similar reasons has finally worked. The truckers had stopped lifting the material from cement plant located in Chandrapur as they demanded a hike in freight.
“Finally on Wednesday, the industry agreed and a 19% hike was allowed,” said Kukku Marwah, president of Nagpur Truckers’ Unity, an association of transporters.
“It would not have been possible for us to operate if the freight was not hiked,” he said.