CIL may shoulder Rs 200-crore burden if PRP gets Cabinet nod

CIL may have to shoulder a burden of Rs 200 crore if the Union Cabinet approves PRP of its employees

Already combating a wage burden of Rs 6,500 crore,state-run Coal India Limited CIL may have to shoulder a burden of nearly Rs 200 crore more if the Union Cabinet approves coal ministrys proposal to revise the Performance Related Pay PRP of the companys employees to be paid from its consolidated accounts.

In a note to the Union Cabinet on June 17,the coal ministry proposed that CIL should be allowed to determine the corpus of PRP which is due since 2007-08 on its Profit Before tax PBT based on its consolidated accounts and not from the individual accounts of its seven subsidiaries as required by the Department of Public Enterprises DPE.

Justifying the proposal,it cited that a remuneration committee constituted by CIL has recommended that PRP should be paid to all executives of CIL and its subsidiaries based on the performance of the individual company vis-a-vis their MoUs as well as individual performance rating. It also suggested the corpus for PRP should come from CILs aggregate PBT.

The ministry said CIL is the holding company and appoints all executives and controls the cadre. As per the terms of the employment,the senior functionaries are transferable from one subsidiary to another compulsorily on promotion. So unequal PRP among executives of various subsidiaries would create human resource problems for us, it said.

The ministry further cited that Central Mine Planning and Design Institute Ltd has been a low-profit churning company as it charges coal companies on cost basis for services rendered to them. Their executives deserve to get PRP on par with the executives of the subsidiary firms. According to the DPEs model of PRP,endorsed by the Union Cabinet in 2008,any modification in this regard requires its approval,the minister pointed out.

The DPE too has supported our proposal,but has said the actual payment should be made by individual companies from their own PBT or from the consolidated PBT of holding companys consolidated accounts. The total financial implication of this proposal for 2007-08,2008-09,2009-10 is Rs 192.47 crore, coal minister Sriprakash Jaiswal said.