Document of The World Bank FOR OFFICIAL USE ONLY Report No. 15238 PROJECT COMPLETION REPORT INDIA JHARIA COKING COAL PROJECT (LOAN 2498-IN) December 29, 1995 Energy and Infrastructure Operations Division Country Department II South Asia Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (As of May 30,1994) Currency units = Rupees (Rs) One Rupee = US$ 0.316 (approx.) One US Dollar = Rs 31.6 MEASURES AND EQUIVALENTS 1 Million cubic meters of gas = 37 million cubic feet of gas = 6,500 barrels of oil = 890 mt of oil = 1,940 mt of (Indian) coal 1 British thermal unit (Btu) = 0.252 kilokalories I m3 = cubic meter ABBREVIATIONS AND ACRONYMS BCCL - Bharat Coking Coal Ltd. CCL - Central Coalfields Ltd. CIL - Coal India Ltd. GOI - Government of India NCL - Northern Coalfields Ltd. NHPC - National Hydro Power Corporation NTPC - National Thermal Power Corporation PAF - Project-affected family PAP - Project-affected person SAIL - Steel Authority of India Ltd. FISCAL YEAR April 1 - March 31 FOR OFFICIAL USE ONLY THE WORLD BANK Washington, D.C. 20433 U.S.A. Office of Director-General Deceber 29, 195 Operations Evaluation MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Renort on India - Jharia Cokinp Coal Proiect (Loan 2498-IN) Attached is the Project Completion Report on the India - Jharia Coking Coal Project (Loan 2498-IN, approved in FY85), prepared by the South Asia Regional Office, with Part II prepared by the implementing agency. The project, which closed at the end of 1993, had two objectives: to increase the output and productivity of coking coal production, and to raise the quality of coking coal supplies to the steel industry. The US$248 million loan consisted of two subcomponents: the first, was to develop an open cast mine to produce 2.5 million tons per year of raw (unwashed) coking coal; and, the second, to develop a highly mechanized underground mine, with its dedicated washery, to produce 3 million tons per year of raw coking coal. In addition, the project was designed to assist the implementing agency, Bharat Coking Coal Ltd. (BCCL)- - a subsidiary of Coal India Limited (CIL)- - in three important areas: underground mine operating practices, shaft sinking and transportation of stowing materials. The first component ran into difficulties with resettlement of the families residing at the site of the open cast mine. By the end of 1993, only 160 families out of a total of 711 had been resettled. The remaining families demanded employment for all individuals above 18 years of age. While the company had provided employment for 247 project affected people in the first group, it could not accommodate such a large number, given its already overstaffed organization. The company, therefore, decided not to resettle the remaining families and to reduce the mining area. Consequently, production only reached 600,000 tons of raw coal in 1993. In the underground mine, after the sinking of the first shaft it was discovered that the actual geology of the mine differed considerably from the initial assessment, because of the presence of dikes, faults and other anomalies. This precluded the large scale introduction of mechanized equipment, effectively destroying the mine's profitability. The component was canceled, leading to the cancellation of a large part of the loan. The studies related to shaft sinking, underground mine operating practices and transportation of stowing materials were completed, but the results can only be of use in future operations. With the partial cancellation of the open cast mine component, out of a loan of US$248 million, only US$55.3 million was disbursed. The reestimated ERR for the open cast mine is reported at 28.2 percent. Based on the above, the project outcome is rated as unsatisfactory and its institutional development impact as modest. The sustainability of the reduced open cast mining operation is, however, rated as likely because of the existence of sufficient reserves, the operational capability of the company and the low cost of its operations. Bank performance is also rated as unsatisfactory Lessons include the importance of careful Bank appraisal of the technical and geological aspects of mining projects and the risks of overreliance on Borrower's assessments of mining potential. In projects requiring substantial resettlement and land acquisition, the Bank needs to ensure that satisfactory plans to deal with families to be displaced are in place at an early stage. The PCR is of satisfactory quality. An audit is planned. Attachment This document has a restricted distribution and may be used only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. FOR OFFICIAL USE ONLY PROJECT COMPLETION REPORT INDIA JHARIA COKING COAL PROJECT (LOAN 2498-IN) TABLE OF CONTENTS PAGE NO. PREFACE ................................................. i EVALUATION SUMMARY ...................................... iii PART I: PROJECT REVIEW FROM BANK PERSPECTIVE ................. 1 Project ldentity ............................................ 1 Background .............................................. 1 Project objectives and description ................................. 2 Project design and organization .................................. 3 Project implementation ....................................... 4 Project cost and financing ..................................... 7 Project results ............................................. 7 Project Sustainability ........................................ 8 Bank Performance .......................................... 8 Borrower Performance ....................................... 9 Project Relationships ........................................ 9 Consulting Services ......................................... 10 Project Documentation and Data ................................. 10 PART II: PROJECT REVIEW FROM BORROWER'S PERSPECTIVE ... ........ 11 Preface ................................................. 11 Project Implementation ...................................... 11 Comments on Part I .... . ................................... 12 Cancellation of Part of the Loan ................................ 12 Environmental issues ....................................... 12 Resettlement and rehabilitation of project affected people ................. 13 Procurement Procedures ..................................... 13 Comments on Part III ........................................ 14 Bank Performance ......................................... 14 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed wiLhout World Bank authorization. Borrower's Performance ...................................... 14 Lessons Learned ........................................... 14 PART III: STATISTICAL INFORMATION ............................ 15 A. Related Bank loans ........................................ 15 B. Project Timetable ......................................... 16 C. Disbursements .......................................... 16 D. Project Implementation ..................................... 18 E. Project costs and financing ................................... 19 F. Project Results .......................................... 21 1. Economic impact ........................................ 21 2. Financial impact ......................................... 23 3. Social impact .. ....................................... 24 4. Studies .............................................. 25 G.Status of Covenants ........................................ 27 H. Use of Bank resources ..................................... 28 ANNEX 1.1 COAL INDIA LIMITED: INCOME STATEMENTS .... ......... 30 ANNEX 2.1 BHARAT COKING COAL LIMITED ....................... 33 PROJECT COMPLETION REPORT INDIA JHARIA COKING COAL PROJECT LOAN 2498-IN PREFACE This is the Project Completion Report (PCR) for the Jharia Coking Coal Project in India, for which Loan 2498-IN in the amount of US$248 million was approved on March 7, 1985. The loan was closed on December 31, 1993, one year behind schedule. US$192.7 million of this loan have been canceled; US$165.3 million, when a review of the geological conditions for the Pootkee-Bulliary Underground Mine component indicated that the original mine design could not be implemented and no other economically viable option could be found; US$25.0 million, when a change in the layout of the BlocklI Opencast Mine, caused by the inability of the implementing agency to satisfactorily resolve a dispute over compensation to land owners, led to a corresponding change in the list of required equipment; and US$2.4 million, as a result of lower-than-projected equipment cost. The remainder of the loan was fully disbursed. The last disbursement was in July 1993. The PCR was jointly prepared by the Energy Division of the India Country Department (Preface, Evaluation Summary, Part I and Part III) and the Borrower (Part II). Preparation of this PCR was started during the Bank's final supervision mission of the project in January 1994, and is based, inter alia, on the Staff Appraisal Report; the Loan and Project Agreements; supervision reports; correspondence between the Bank and the Borrower; and internal Bank memoranda. - Hi - PROJECT COMPLETION REPORT INDIA JHARIA COKING COAL PROJECT PROJECT LOAN 2498-IN EVALUATION SUMMARY Objectives The Jharia Coking Coal Project had two major objectives: One, to raise the output, recovery and productivity in the field of coking coal production through the development of (i)the Block II opencast coal mine, the first large scale opencast mine to be implemented by BCCL and (ii) the Pootkee-Bulliary mine, the largest underground mine, in terms of output (3 milion tons per year), in India. And, two, to raise the quality of coking coal supplies to the steel industry through the development of a sector-wide action program to improve coking coal quality and by expanding the production of mines yielding high quality coking coal. Both, the output from the Pootkee-Bulliary mine and from the Block II opencast coal mine were to augment the supplies of high quality coking coal. In addition, the project was designed to extend the Bank's assistance into three important areas: (i) underground mine operating practices (improved procedures for underground mining using highly mechanized equipment); (ii) shaft sinking (improved efficiency through better organization and more modern equipment); and (iii) transportation of stowing materials (study of alternative modes of transportation of sand for stowing). Implementation experience While the project was designed well, expectations with regard to the ability of the implementing agency to deal with difficult resettlement issues and the assessment of geotechnical conditions for highly mechanized underground mines were overly optimistic. Implementation of the P'ock II Opencast Mine affected 711 families or 4266 persons (assuming a household consists on average of six persons). BCCL informed the Bank that it has up to now resettled 160 families (or 960 people). The company has built two resettlement sites, complete with infrastructure facilities and civic amenities, to house aU project-affected people, and provided employment for 247 project affected people. At this point, a deadlock has been reached since the remaining 551 project-affected families (or 3306 people) refuse to vacate their houses on the project site unless BCCL offers employment to every person above 18. The mine area had to be re-designed to enable some mining to be done at a much-reduced annual tonnage, while deploying less equipment than was originally scheduled. In addition, mine operations have also been severely affected by major underground fires in the coal seam. - iv - The Pootkee Bulliary underground mine had to be canceled altogether since it was found, on detailed examination, that geological conditions would allow the deployment of only a fraction of the scheduled fully-mechanized longwall equipment scheduled in the original design and that the resultant revised economic evaluation did not satisfy the minimum acceptance criteria of either the Government's Public Investment Board or the Bank. Results The original project objectives were not achieved. The Pootkee Bulliary underground mine component had to be canceled. The Block II opencast mine, due to land acquisition problems and underground mine fires, is currently producing only about a quarter of its design output tonnage; it is unlikely to ever produce more than a half of its design tonnage. In retrospect, too much was taken for granted at appraisal, in respect of both the geological conditions at Pootkee Bulliary underground mine and the ability of the mining company to deal with the resettlement of project-affected people residing within the surface area of the Block II opencast mine. A comparison of the actual financial (6.9%) and economic rates (38.6%) of return for the Block II Opencast Mine with the projections at appraisal shows a significant decline in the financial rate (12% at appraisal), but an improvement in the economic rate of return (28.2%). This result is due in part to the fact that only part of the projected efficiency gains were achieved and the divergence between economic prices of coal (based on imported Australian coal) and the prices BCCL realizes. Sustainability Based on BCCL's current projections the Opencast Block II mine will be operated for another 15 years, until 2009. Assuming the coal company continues to succeed in keeping the mine-fire, that currently affects operations, under control, the project is expected to continue to yield modest financial and satisfactory economic returns. While BCCL management insist that they will reach two million tons per annum in the following years, the Bank's engineer's opinion is that less than half of that annual tonnage will ever be achieved. Findings and lessons leamed It is clear that too much optimism was expressed in the initial assessment of the ease of compensating, moving and resettling the population residing on the Block II opencast mine area. There are opinions expressed by both CIL and Bank staff that Bank involvement in coal mining projects in which major resettlement is necessary generates feelings among the potential oustees that they can obtain far better terms than could be expected otherwise. In both this, the Jharia project, and the Sonepur Bazari component of the Coal Mining and Coal Quality Improvement project (which is currently beeing implemented), land acquisition difficulties have resulted in crippling delays and a considerable increase in project costs. If at all possible, Bank financing of - v similar projects should not be undertaken unless land acquisition has been entirely completed in advance. In the case of Pootkee Bulliary underground mine too much confidence was placed in the Borrower's assessment of the mining potential at appraisal. It was only later, when an exhaustive examination was made by consultants in order to schedule the deployment of the six fully mechanized longwall mining units, that it became clear that opportunities existed for only one or two units at the most, thus destroying the viability of that component of the project and forcing cancellation of the major part (67%) of the loan. PART I PROJECT REVIEW FROM BANK PERSPECTIVE Project Identity Project Name: Jharia Coking Coal Project Loan No. 2498-IN RVP Unit: South Asia Region Country: India Sector: Energy Subsector: Coal Background Coal is India's largest source of commercial energy. Almost 70% of annual coal output is used to generate electric power; the remaining 30% are consumed by a variety of industrial enterprises. ORGANIZATION OF THE COAL INDUSTRY. Coal production is largely in the hands of seven coal companies, which operate in different geographical regions of the country. An eighth company is engaged in mine planing and design. Organizationally, these coal companies are subsidiaries of Coal India Ltd. (CIL), which was established after nationalization of the industry in the early 1970s as a holding company with the explicit purpose to manage the coal industry. CIL is fully owned by the central government. One of these subsidiary companies is Bharat Coking Coal Limited (BCCL), which is responsible for production from the Jharia coalfield, India's primary source of prime coking coal for the steel industry. THE GOVERNMENT'S STRATEGY. After the steep increase of international oil prices in the 1970, the Indian Government established a working group to review India's energy policy. One of the main recommendations of this Working Group on Energy Policy was substitution of oil products with energy based on indigenous coal. This led to a massive shift of resources into the power sector. To facilitate this, the central goverrunent established the National Thermal Power Corporation (NTPC) and the National Hydro Power Corporation (NHPC); in parallel, the Goverrment decided to nationalize the coal industry. This provided the coal industry with access to public resources which enabled it to finance the investments required to meet the rapidly growing demand for coal. The Government pursued a similar approach with regard to its steel industry. The Steel Authority of India Ltd. (SAIL) was established to control the production of steel in India and Bharat Coking Coal Ltd. (BCCL) to manage the core of the country's nationalized coking coal mines. Immediately after nationalization of the coal mining industry in 1972 the Government's aim was to increase coal production as quickly as technically feasible. Little regard was given to efficiency and coal quality. By the early 1980s recognized the cost this strategy imposed on - 2 - the economy and took steps to improve the efficiency of mining operations and to raise coal quality. The Government then had the following aims for the industry: (a) the development of new, large-scale, highly mechanized mines to allow rapid expansion of production with due regard to safety and environmental protection and using increasingly efficient technologies and equipment; (b) the rehabilitation and mechanization of certain of mines producing prime coking coal in order to reduce the need for imports; (c) improvement in the availability and cost of coal to distant consumers by optimizing mine/consumer linkages, improving transportation systems and giving priority to the exploration and development of mines in southern India; and (d) the introduction of measures to improve the quality and consistency of coal supplies to consumers, reduce transportation requirements and improve the efficiency of thermal power units, steel plants, industrial boilers, etc. THE BANK'S ASSISTANCE STRATEGY. The Bank's involvement in the Indian coal sector began with a loan for the Chasnulla mine (Coal Production Project TO 287) in 1961. A major accident at this mine, killing 175 miners, led to a hiatus of almost two decades in the Bank's support for this sector. In the late 1970s the Bank decided to explore again the possibility of extending its support to the coal sector. A mission to review the coal sector visited India in 1980, and its report, India Coal Sector Report (Report 3601-IN), was issued in September 1982. The report endorsed Coal India's strategy to rely increasingly on highly mechanized large opencast mining operations to meet the expected increase in coal demand, and to raise the efficiency of underground mines through mechanization. The Bank's renewed involvement in the sector started with the Dudhichua Coal Project, which was designed to bring modern, state-of-the-art opencast mining technology to the Indian coal industry. In addition to improving mine design and operating practices, the project provided technical assistance for a review of coal transport and distribution from mines to power stations. Within a period two years the Board approved two more projects, the Jharia Coking Coal Project, which extended these efforts to the Jharia coalfield, India's largest resource of prime coking coal, and the Coal Mining Coal Quality Improvement Project, which did the same for mining operations in the Raniganj and Korba coalfields. With these three operations, the Bank had achieved the primary aim of its assistance to the coal sector, to assist Coal India Ltd. (CIL) in raising the efficiency of its opencast and uncdarground mining operations in major coal producing areas through mechanization, improved mine design and better mining practices; and in implementing measures to improve the quality of coal produced. Project objectives and description PROJECT OBJECTIVES. The Jharia Coking Coal Project had two major objectives: One, to raise the output, recovery and productivity in the field of coking coal production through the development of - 3 - (i) the Block II opencast coal mine, the first large scale opencast mine to be implemented by BCCL and (ii) the Pootkee-Bulliary mine, the largest underground mine, in terms of output (3 million tons per year), in India. And, two, to raise the quality of coking coal supplies to the steel industry through the development of a sector-wide action program to improve coking coal quality and by expanding the production of mines yielding high quality coking coal. Both, the output from the Pootkee- Bulliary mine and from the Block II opencast coal mine were to augment the supplies of high quality coking coal. In addition, the project was designed to extend the Bank's assistance into three important areas: * underground mine operating practices (improved procedures for underground mining using highly mechanized equipment); * shaft sinking (improved efficiency through better organization and more modem equipment); and * transportation of stowing materials (study of alternative modes of transportation of sand for stowing). PROJECT COMPONENTS. The project comprised the following components (a) The development of the Block II opencast coking-coal mine designed to produce 2.5 million tons of raw (unwashed) coking coal per year with an average ash content of 45% which, after washing, would yield 1,125,000 tons of coking coal with an ash content of 17%. The mine was designed to have a stripping ratio of 4.1 cubic meters of overburden to each ton of raw coal, a maximum mining depth of 220 meters and a 17 year production life. The new Madhuband coal washery, for which no financial support from the Bank was provided under this loan, was to be built on a nearby site, to process the production from Block II. (b) The development of Pootkee-Bulliary mine, which was designed to be the largest (in terms of annual coal output) mechanized underground mine in India, with a designed production rate of three million tons per year of raw (unwashed) coking coal similar in quality to that produced by the Block II mine. Two new mine- shafts were in the process of being sunk with Polish assistance, a dedicated coal washery was to be constructed and all necessary surface facilities and infrastructure were to be provided under this project. Project design and organization The Jharia project was designed to achieve its twin objectives, to improve the efficiency of opencast and underground mining and to raise the quality and quantity of coking coal in India through the development of an opencast and an underground mine with an associated washery. The underlying assumption was that the technology and operating practices that would be introduced in these mines through this project would eventually be adopted by other mines. The Jharia coalfield was chosen because of its reserves of high quality coking coal. The field, which is India's largest reserve of coking coal and its only indigenous source of 'prime' coking coal for the steel industry, has been intensively mined for well over a hundred years, originally using only manual labor in underground and primitive opencast mining. The project was intended to bring international state-of-the-art technology to both opencast and underground mines. Opencast mining productivity was to be improved by the introduction of large electric draglines and shovels, together with larger mining trucks and ancillary equipment. Underground mining production was to be increased by the introduction and use of fully mechanized, longwall mining equipment. Additional washing facilities were to be provided to process the coal produced and technical assistance would be provided. The Bank's loan of US$248 million financed about 35% of the total cost of the project of US$696 million with foreign costs of US$245 million and local costs of US$451 million. Bank financing was limited to that required for the procurement of mining equipment for both mines, the coal washery at Pootkee Bulliary and some technical consultancy. Given the objectives, the scope and scale of the project was appropriate, and so was the timing. India's coal companies were keen to gain access to state-of-the-art mining technology and operating practices. The decision to make three loans (each aimed at different beneficiary coal companies) with similar objectives in rather quick succession, takes into account that fact that these companies are fairly self-contained and operate at quite a distance from each other. Each of these loans supported projects that were tailored to the unique circumstances of the beneficiary coal companies. The aim of this lending strategy was to provide CIL's subsidiary coal companies with a 'heavy dose' of state-of-the-art technology transfer and to support institutional changes that would improve the efficiency of mining operations and the quality of coal to consumers. The beneficiary of the loan was Bharat Coking Coal Limited (BCCL), an operating subsidiary of Coal India Limited (CIL). While BCCL was responsible for implementation of the project, CIL were responsible for the procurement of all the mobile equipment. Procurement of the fixed installations, i.e. coal washing plants, was to be the responsibility of BCCL. Project implementation LOAN EFFECTIVENESS AND PROJECT START-UP. The loan was approved on March 7, 1985 and signed on May 10, 1985. It became effective on August 8, 1985. IMPLEMENTATION (BLOCK II OPENCAST MINE). The Block II Opencast Mine component of the project was scheduled to have attained its target production of 2.5 million tons per year (mtpy) during the year 1987/88, even though procurement of Bank-financed equipment would not have been completed before the end of 1989. Appraisal did not anticipate problems in the acquisition of the land necessary to allow both the opencast mining and the construction of surface facilities for the underground mine and expected that solutions would not be difficult to find if problems were encountered. Construction of the externally financed washer nearby at Madhuband was scheduled to have been completed by April 1988 to coincide with the attainment of full coal output from the mine. Annual coal production at Block II has, at the date of this report, reached only 600,000 tons (less than 25% of the planned tonnage) and it is clear that construction of the Madhuband washery is still several years from completion. Coal is presently being washed at BCCL's Dugdha Washery. LAND ACQUISITION AND RESETTLEMENT. Implementation of the project affected 711 families or 4266 persons (assuming a household consists on average of six persons). All of these families owned land, houses or both on the land required for the mine. No socio-economic survey had been prepared at the time of appraisal, and there is no record of the number of landless people that could have been affected by the project. However, BCCL will be asked to carry out such a survey to assess the remedial rehabilitation needs of all people affected by the project under the proposed Coal Sector Rehabilitation Project. As far as the Jharia Coking Coal Project is concerned, BCCL informed the Bank that it has up to now resettled 160 families (or 960 people). BCCL has built two resettlement sites, complete with infrastructure facilities and civic amenities, to house all project-affected people, and provided employment for 247 project affected people. At this point, a deadlock has been reached since the remaining 551 project-affected families (or 3306 people) refuse to vacate their houses on the project site unless BCCL offers employment to every person above 18. Making such an offer would put a heavy financial burden on an already financially poorly performing project and company. BCCL has a significant overstaffing problem. Considering that jobs with the coal industry pay about 8-10 times the minimum wage and are very secure, further additions to BCCL's payroll over and above the company's needs would just add to its losses. Within the surface area of the mine, seemingly insoluble land acquisition problems, caused by the continued refusal of landowners and tenants to vacate their land and properties, have caused considerable fragmentation of the planned mining areas and have necessitated major redesign of the mine itself. Clearly, one of the more important lessons to be learnt from the implementation of this component is that land acquisition and resettlement issues need to be resolved before the Bank commits itself to support a project. At a minimum, a rehabilitation action plan reflecting the agreements readhed with project-affected people needs to be available before the Bank becomes involved in a project. At the time this project was appraised, BCCL could point out to the Bank that effective mechanisms (in form of CIL's resettlement and rehabilitation policy and the various legal provisions under which land is acquired in India) were in place to successfully complete land acquisition and resettlement for this project. The rather successful experience with land acquisition and resettlement under the Dudhichua Coal Project gave the Bank little reason to doubt the effectiveness of BCCL's approach to land acquisition. In retrospect, it is easy to see that landowners and other project-affected people gained through the Bank's involvement in the project additional leverage to press their demand for employment with BCCL. (Earnings in the coal industry are about 8-10 times the minimum wage, and most project- affected people prefer this to any other form of compensation). IMPLEMENTATION (POOTKEE BULLIARY UNDERGROUND MINE). The mine shafts for the underground mine at Pootkee Bulliary were sunk and constructed with Polish technical assistance. During 1989, British Mining Consultants Ltd. carried out a detailed examination of the engineering geology in order to design and schedule the deployment of the proposed mining equipment. They found that the geological conditions which were believed at the date of appraisal to exist and that were essential for the deployment of the six fully mechanized longwall units planned for the mine did not, in fact, exist. Far in excess of that which had been anticipated were the multiple geological faulting and large zones of thermally-degraded coal (jhama). These conditions made it impracticable to deploy more than one (or at most, two) of the six proposed longwall units, thus severely reducing the annual production capability and effectively destroying the mine's profitability. Further feasibility studies carried out by BCCL and the Central Mine Planning and Design Institute (CMPDI), CILs planning subsidiary, failed to come up with a revised project proposal that would yield finical and economic rates of return acceptable to the India's Public Investment Board or the Bank. As a consequence, US$165.3 million of the Bank loan, which was allocated to the development of the Pootkee Bulliary Mine component were canceled in November 1989, which, when added to the above-mentioned US$25 million at Block II, reduced the loan by a total of US$190.3 million to US$57.7 million. Despite the foregoing, BCCL have continued working at the mine and it is presently credited with producing coal at the rate of about 250,000 tons per year. PROCUREMENT. By prior agreement with the Bank, procurement was carried out by a special cell previously created for the Northern Coalfields' Dudhichua project within the Coal India Ltd. headquarters in Calcutta and not by the beneficiary, BCCL. Mobile mining equipment was procured by ICB under Bank guidelines. BCCL staff were to have procured the Pootkee Bulliary coal washery but, in the event, there was no requirement for them to be involved as it was no longer required in the wake of the cancellation of the Pootkee Bulliary component of the loan. Such problems as were encountered in the procurement of goods in the two components of this project (and in other CIL Bank-financed projects) were caused primarily by shortcomings in the CIL Notice of Invitation to Tender (NIT) and differences between that and the Bank's recommended Sample Bidding Document. In addition, recurring problems were caused by inappropriate and insufficiently precise equipment specifications. Coal India has also been reluctant to impose penalties for non-observance of contract conditions when this would involve state-owned suppliers. Combined with the 15% preference allowed, during evaluation, to domestic manufacturers this situation has resulted in contract awards to companies which have consistently responded with delayed (and even incomplete) supply and inferior quality goods being supplied without effective penalty. Recent problems quoted by BCCL staff involved spare-parts for the Bank-financed mining equipment taking as long as two years to procure. Both in this project and in the earlier Dudhichua project it was found that the prices for some of the mobile mining equipment which had been assumed in the appraisal were far in excess of those achieved in practice. It is believed that the prior (and still continuing) CIL practice of negotiating prices for equipment after initial bidding results in artificially high prices being bid in the first instance, since bidders are always assured of a second chance to negotiate their prices downwards and obtain an order. Bidders were quick to realize the Bank's ICB rules and accordingly priced their bids at more realistic and competitive levels. Project cost and financing PROJECT COSTS. At the time of appraisal, the project was estimated to cost US$696 million, which consisted of US$271.5 million for the Block H Opencast Mine and US$424.5 million for the Pootkee-Bulliary Underground Mine. After cancellation of the support for the Pootkee-Bulliary Underground Mine and cancellation of US$25 million of project savings (BCCL's decision not to procure two walking draglines) under the Block II Opencast Mine the project cost dropped to US$190.7 million. Correspondingly, the original financing requirements of US$696 million declined to US$196.1 million based on the cost estimates after the cancellations. At the time the project closed actual expenditures (US$127.8) amounted to only about 65% of projected financing requirements. As with the Dudhichua Coal Project, expenditures for locally procured items had been underestimated at the time of appraisal, mainly because a larger share of the contracts than anticipated at appraisal were awarded to Indian suppliers and the ICB process drastically reduced the cost of imported items. DISBURSEMENTS. From the original loan of US$248 million only US$55.3 million (equivalent to 22.3%) were disbursed. This was due to the cancellation, in November 1989, of US$25.0 million, for the non-procurement of two walking draglines for Block II opencast mine, and US$165.3 million due to the effective abandonment of the Pootkee Bulliary underground mine component. Of the remaining US$57.7 million, US$2.4 million was canceled as unused at loan closing. Project results ATTAINMENT OF PROJECT OBJECTIVES. The original project objectives were not achieved. The Pootkee Bulliary underground mine component had to be canceled when adverse mining conditions, sufficiently bad to prevent deployment of the state-of-the-art equipment which had been designed into the mine, were found to exist. The Block II opencast mine, due primarily to virtually insuperable land acquisition problems and, secondarily, to the underground mine fires, is currently producing only about a quarter of its design output tonnage and is unlikely ever to produce more than a half of its design tonnage. In consequence, the objective of introducing high volume output of prime coking coal from a large-scale underground mine was lost and the demonstration of the effectiveness of modem opencast mining techniques could not be shown, due to difficulties which were beyond the capacity of the mining company to overcome. CAUSES OF THE VARIANCES BETWEEN PLANNED AND ACTUAL RESULTS. In the circumstances, little or no positive impact could have been achieved in the area. In retrospect, too much was taken for granted at appraisal, in respect of both the geological conditions at Pootkee Bulliary underground mine and the ability of the mining company to deal with the - 8 - resettlement of project-affected people residing within the surface area of the Block II opencast mine. FINANCIAL AND ECONOMIC RATES OF RETURN. In light of the cancellation of the Pootkee-Bulliary Underground Mine component, only the financial and economic rates of return for the Block II Opencast Mine were estimated. A comparison of the actual financial (6.9%) and economic rates 38.6%) of return with the projections at appraisal shows a significant decline in the financial rate (12% at appraisal), but an improvement in the economic rate of return (28.2%). This result is due in part to the fact that only part of the projected efficiency gains were achieved and the divergence between economic prices of coal (based on imported Australian coal) and the prices BCCL realizes. Project Sustainability Based on BCCL's current projections the Opencast Block II mine will be operated for another 15 years, until 2009. Assuming the coal company continues to succeed in keeping the mine-fire, that currently affects operations, under control, the project is expected to continue to yield modest financial and satisfactory economic returns. (See financial and economic cost/benefit streams in Part III). In addition to controlling the mine fire, the continued commercial viability of the opencast mine depends on whether CIL will continue to be able to pass increase in wages for miners on to consumers through price increases. This was the practice in the past. The Government has indicated that it will abolish price controls on coal. In order to be in a better position to deal with high economic, environmental and social cost of mine fires, BCCL is receiving technical assistance under a credit approved in December 1992. The Government has sought the Bank's assistance in identifying experts that could work with BCCL to find ways to extinguish or at least contain these fires. The fire that hampers operations in the Opencast Block II mine will benefit from these efforts. Critical for the continued success of the project will be the outcome of BCCL's efforts to resettle the people that up to now have refused to move to the resettlement site in the expectation of eventually getting jobs with the coal company. Under the proposed Coal Sector Rehabilitation Project, which currently under preparation, the resettlement and compensation issues will be revisited; if BCCL's resettlement and compensation actions are found to be deficient in one way or another, a remedial action plan will be prepared. Bank Performance The clear positive potential of Dudhichua, the previous Bank-financed, Indian coal mining project, was probably a factor in leading Bank staff to an over-optimism regarding the implementation of this project. In retrospect, the assumptions made by the Central Mine Planning and Design Institute (CMPDI), the planning subsidiary of Coal India Ltd., regarding the technical merits of the Pootkee Bulliary underground mine were based on inadequate investigation. The further investigation carried out by consultants during project implementation, which was supposed only to define the optimum deployment of the proposed -9- state-of-the-art fully mechanized longwall equipment, instead revealed that technically acceptable conditions for deployment of more than one or two of the six units proposed was not possible. Revised financial analyses showed rates of return unacceptable to either the Indian Public Investment Board or to the Bank. That component was therefore canceled. In addition, assumptions regarding the resettlement of the population residing within the area of the proposed Block II opencast mine were probably influenced by the ease of resettlement experienced at Dudhichua. The assumptions were proved erroneous; at loan closure only 22% of the potential oustees had been resettled. The latter experience has underlined the need for the Bank to more closely examine future project assumptions regarding land acquisition and resettlement issues. During supervision, Bharat Coking Coal Ltd. (BCCL) were allowed as much freedom to vary the equipment configuration as they requested. In addition, the difficulty of obtaining timely spare-parts for the Bank-financed mining equipment led to allowing BCCL to obtain larger packages of spare-parts when they became available together with what CIL terms 'float-assemblies', i.e. complete spare diesel engines, complete spare transmission assemblies, etc., to ensure the availability of mining equipment under adverse maintenance conditions. Additional lessons to be learned from the implementation of the Jharia Coking Coal Project include: * the need for standard bidding documents, in order to minimize the possibility of disputes and misprocurement (CIL has agreed to use standard bidding documents under the forthcoming Coal Sector Rehabilitation Project); * the desirability of providing CrL with frequent and timely advice on procurement issues, in order to avoid lengthy procurement-related implementation delays (CIL has agreed to use the services of an expatriate company specializing in procurement for the preparation of the technical specifications of bid documents and the evaluation of bids under the forthcoming Coal Sector Rehabilitation Project); and * the need to consider in the estimation of project cost that procurement under ICB will reduce the cost of items procured under this method by about 30%. Borrower Performance The beneficiaries of the project, CIL and BCCL, performed well, bearing in mind the difficulties under which they are operating. They were generally responsive to recommendations from the Bank, and made every effort to comply with covenants. Project Relationships The relationships between CIL/BCCL and the Bank have been consistently good throughout the project. The frank and open discussions which took place during supervision - 10 - missions resulted in satisfactory solutions in spite of differences in viewpoints which occurred from time to time; they helped Bank staff to understand better and appreciate the environment and constraints under which CIL's and BCCL's management are operating; and they provided an opportunity to convey to CIL and BCCL the rationale for the positions taken by the Bank. Consulting Services Only two consultant companies were involved in the project, ILF, to carry out a study of transporting sand for stowing purposes in the now-canceled Pootkee Bulliary mine, and British Mining Consultants Ltd., to design the deployment and use of longwall mining equipment in the same mine. Both companies performed satisfactorily. Project Documentation and Data The Bank's documentation proved invaluable to the project, although much of the equipment procurement listings had to be modified due to cancellations and variations brought about by physical circumstances. Experience in writing this PCR has shown clearly that preparation for a PCR should begin at appraisal or soon afterwards, when data specifically destined for use in the PCR should be required to be included by Borrowers in their regular reports to the Bank. A quarterly report pro-forma should be decided upon at completion of the appraisal report and included in that report for the benefit of Borrower and Bank. - 11 - PART II PROIECT REVIEW FROM BORROWER'S PERSPECTIVE Preface During early 1980s CIL sought the World Bank assistance for Jharia Coking Coal Project owned by one of its subsidiaries Bharat Coking Coal Ltd. (BCCL), the major producer of prime coking coal in India. The objective of the loan was to increase the output and to improve the recovery and productivity in the field of coking coal production through development of a large scale opencast mine in Block II and development of a large highly mechanized underground mine in Pootkee-Bulliary. It also envisaged to raise the quality of coking coal supply to the steel plant by construction of washeries linked to these projects. The Bank's loan of US$248 million (30% of the estimated total cost of the project) was limited to the procurement of mining equipment for both the mines and coal washery at Pootkee-Bulliary and also for some technical assistance. Project Implementation Block II. During the implementation of the project two major difficulties were encountered. The problem of land acquisition and resettlement became serious as the inhabitants insisted on employment of each eligible project affected adult person. As BCCL is having surplus manpower it could absorb such people only in phases depending on the requirement and other financial constraints. This has put a heavy financial burden on BCCL which has significantly overstaffing as well as financial problem. As a result around 500 project affected families are yet to vacate their houses on the project site. After considering all associated problems certain area of the mine-take has been excluded from mining activities for the time being. The willing people are being gradually resettled in properly developed resettlement sites which have provisions of modem amenities. The project also faced another uaforese".n problem. While implementing it was found that the extent of fire affected area was more extensive than earlier envisaged. Naturally certain advance action was required to deal with the fire before the mining could be extended to those areas. Due to these problems the implementation was delayed and the project was closed one year behind schedule. Action are in hand to resettle the project affected people as soon as feasible and also to improve the output to the optimum level under the given situation. Pootkee-Bulliary. The mine shafts at Pootkee-Bulliary was constructed with the assistance of Polish experts. During the exploitation underground it was experienced that there was wide variation between the pre-project geological assessment and the actual. Most of the mine take was very adversely affected by dikes, faults, burning of seams, etc. Large scale - 12 - introduction of mechanized longwall was not feasible. British Mining Consultants were engaged to carry out a detailed study and CMPDI and BCCL also made the reassessment of the geomining conditions. It was concluded that large scale mechanized mining methods could not be introduced though earlier envisaged. With other alternative mining technique the targeted production of 3 mtpy also could not be achieved. After making a tailed techno-economic reassessment it was concluded that with this modifications the mine operations became economically unviable. As a consequence, US$165.3 million of the Bank loan was canceled in November 1989. However, BCCL is continuing with the modified mining method and at present producing around 0.3 mtpy Comments on Part I The analysis made by the Bank under Part I is quite comprehensive and has covered all important aspects. We generally agree with the conclusion made by the Bank. Cancellation of Part of the Loan As already said above, the Jharia Coking Coal has two components out of which Pootkee-Bulliary underground mine and the Pootkee washery had to be canceled. As a consequence the Bank loan of US$165.3 million in respect of Pootkee-Bulliary underground project including the washery was canceled. Due to the change in mine area and mine plan in Block II the equipment requirement was scaled down. Further, while finalizing the purchase of opencast equipment for Block II following ICB procedures it was found that the quoted price was on the lower side than the price estimated earlier. As a result amount of US$25 million was not required and hence was surrendered. The overall position is given in the table below: Component-wise allocation of loan in US$ million Original Canceled Revised Block II Opencast Mine 80.7 25.0 55.7 Pootkee-Bulliary U/G including 165.3 165.3 Washery Technical Assistance 2.0 - - Totals 248.0 190.0 57.7 Environmental issues Block II. This opencast project is very much adversely affected by the mine fire in old opencast workings. Moreover the old underground workings within the mine take have also been extensively affected by mine fire. Thus the combustion products have posed serious environmental problems. It is gratifying to note that the project has persistently dealt with this problem to a very great extent and the major fires are now under control by adopting effective fire control measures. A fire control project has also been approved by World Bank (Jharia Mine Fire Control Technical Assistance Project, Cr. 2450-IN) for financing and this - 13 - study will also help the project to deal wilh the fire remove effectively. The land reclamation is also taking place in a systematic manner as the fires are dealt with in proper sequence. It is anticipated that the project will be able to deal with the fire effectively and one of the very serious environmental problems wiUl be dealt with. Afforestation has been done on a large scale and all the rehabilitation sites and the infrastructure sites are now adequately protected by plantation. An organization with experienced engineers has been set up to deal with the problem of fire and other environmental issues. Proper monitoring system bas been introduced. However, the problem being of very serious nature it will require more intensive action to keep all these adverse affects under control. Resettlement and rehabilitation of project affected people Resettlement and rehabilitation issues have been dealt with adequately in the report of the Bank and we agree with the same. Though the problem is very serious in this particular project but with consistent efforts made by the project it is expected that major part of the problem will be resolved. With the new R&R policy of the CIL and by setting up a proper organization for implementation and monitoring it is expected that such problem could be resolved in time in other projects. Procurement Procedures For procurement of equipment for Bank financed projects, "Notices Inviting Tenders" (NIT) of CIL were prepared normally on the basis of Bank's sample bidding document. Bid documents were issued to the prospective bidders only after obtaining World Bank's 'no objection'. Any changes/modifications in the bidding documents also had the World Bank's approval. CIL followed the Bank's procedure for pre-review (Contracts valuing above US$3 million) and post review (contracts valuing within US$3 million ) of the cases by the World Bank. For procurement under World Bank loan CIL has benefited much. Indian suppliers also could quote lower price (about 40-50%) because, as per the policy of GOI such purchases fall under "deemed export" category. Under such category, manufacturers are not to pay custom duty for the import content of the goods and get bac'. excise duty for ir'.igenous component. All the procedures introduced by the Bank are followed strictly. CIL did not hesitate in imposing penalty on dhe defaulting suppliers even if they are state owned like Heavy Engineering Corporation (HEC) or Bharat Earth Movers Limited (BEML). CIL has already recovered 10% penalty from HEC for delayed supply of dragline for Dudhichua project. CIL has also not faced any interference from the Ministerial levels of Government of India in procurement activities and payments. - 14 - C., mments on Part III Report is in order. Bank Performance Both the projects were of difficult nature as they encountered unforeseen problems. In dealing with these problems highly professional Bank's appraisal missions were of great assistance to the project. Borrower's Performance Coal India Limited generally agrees with the assessment made by the Bank. Lessons Learned By implementing a project of this size faced with mining, technical, social problems, with active guidance and consistent monitoring by the Bank officials, the project has benefited in the following areas: a) Project planning and monitoring, b) design and engineering of equipment and construction, c) effective bidding procedures, d) environment management., and e) resettlement and rehabilitation of project affected people. - 15 - PART TTI STATISTICAL INFORMATION A. Related Bank loans Loan Number Year of Purpose of Project Status Comments Project Title Approval Dudhichua Coal 1985 To continue the transfer of Completed See Project Project, Loan technology for highly March 31, 1993 Completion 2393-IN mechanized opencast mines Report for this project Coal NMining and 1987 To continue the transfer of Under Coal Quality technology for highly implementation. Improvement mechanized opencast mines. Project, Loan The project focused on a 2796-IN mine in the Korba coalfield (belonging to Southeastem Coalfields Ltd.) and a mine in the Raniganj coalfield belonging to (Eastern Coalfields Ltd.) NTPC Power 1993 The project comprises: Under The project is Gation a) G. implementation. located in the a) Generation of Capacity Project, Loan Addition; b) Private sector Singrauli 3632-IN component (joint venture coalfield, and component~~~~~~~~ue coalt fromre operations); and c) uses coal from Environments' the Dudhichua strengthening and coal mine resettlement and A ehabilitation - 16 B. Project Timetable Date Planned Date Revised Date Actual Identification September 1982 October 1982 Preparation Appraisal January 1983 March 1983 September 1984 Loan Negotiations January 1985 January 1985 Board Approval March 1985 March 7, 1985 Loan Signing May 10, 1985 Loan Effectiveness August 8, 1985 Loan Closing Date March 31, 1992 First Extension of the Closing Date December 31,1992 Completion April 30, 1992 COMMENTS. Almost two years elapsed between the time the project had been identified and the date of effectiveness. While this may somewhat exceed the time required for the preparation of similar projects, it has to be kept in mind that this was the Bank's first project with a new implementing agency, Bharat Coking Coal Ltd. C. Disbursements Cumulative Estimated and Actual Disbursements US$ Million 12& 1987 198 1 1989 1990 1991 1992 1993 Appraisal Estimate 0.6 55.2 108.8 180.0 202.4 238.6 248.0 248.0 Actual 0.0 21.4 32.6 42.8 50.8 52.4 52.6 55.3 Actual as % of 0.0 38.8 30.0 23.8 25.1 22.0 21.2 22.3 Estimate Date of Final Disbursement: April 29, 1993 - 17 - 250. AppraWsal estiinate 2100 Cancellation of $190.3 miuiot (1989k 150 100i / . - . . - . ~~Actual -.: 50 Closn / ~~~ . - _ v ' ......... . ~~~~~~~~date a~~~~~~~~~~~~~~~~~~~~~~~4a 1985/86 1986/87 1987/88 1988/89: 1989190 1990/91 1991/92 1992/93 Follow-on Project Name: Coal Mining and Coal Quality Improvement Project Loan No.: 2796-IN Loan amount:US$340 mnillion equivalent Date of Board approval: April 21, 1987 - 18 - D. Project Implementation Block II Opencast Mine Pootkee lia Underground Mine Projections at Appraisal (on an annual basis) Year Overburden Raw Coal Washed Raw Coal Washed Removal Production (million tons) Production (million tons) (million m3) (mimillion tonsmi o million tons) 1984/85 1.40 .20 0.09 0.01 0.003 1985/86 1.40 .40 0.18 0.13 0.13 1986/87 2.85 1.50 0.68 0.26 0.18 1987/88 5.95 2.50 1.13 0.37 0.20 1988/89 9.50 2.50 1.13 0.40 0.20 1989/90 9.50 2.50 1.13 0.41 0.35 1990/91 9.50 2.50 1.13 0.70 0.97 1991/92 9.50 2.50 1.13 1.94 1.22 1992/93 9.50 2.50 1.13 2.460 1.45 1993/94 9.50 2.50 1.13 2.942 1.45 1994/95 9.50 2.50 1.13 2.92 1.45 1995/96 9.50 2.50 1.13 3.00 1.45 Actual Achievements (on an annual basis) 1984/85 0.51 0.04 NIL 0.07 NIL 1985/86 0.82 0.14 NIL 0.06 NIL 1986/87 1.90 0.44 NIL 0.02 NIL 1987/88 2.96 0.80 NIL 0.04 NIL 1988/89 4.87 1.02 NIL 0.04 NIL 1989/90 5.10 1.22 NIL 0.11 NIL 1990/91 5.23 0.93 NIL 0.22 NIL 1991/92 5.11 0.61 NIL 0.26 NIL 1992/93 5.44 0.66 NIL 0.29 NIL - 19 - E. Project costs and financing Project Cost Rs million Estimated Cost Actual Cost Local Foreign Total Local Foreign Total Equipment and spares 77.3 138.1 215.5 71.3 34.3 105.6 Land and civil works 47.7 2.5 50.2 5.5 0.0 5.5 Engineering and Training 5.7 0.0 5.7 0.0 0.0 0.0 Preoperating Expenses 9.0 0.7 9.7 10.2 0.0 10.2 Washery 76.2 31.8 108.0 0.0 0.0 0.0 Furniture, Vehicles, etc. 0.0 0.0 0.0 0.3 0.0 0.3 Technical assistance 0.0 2.0 2.0 0.0 1.4 1.4 Duties and taxes 94.5 0.0 94.5 0.0 0.0 0.0 Base cost 310.4 175.1 485.5 87.3 35.7 123.0 Physical contingencies 24.2 10.4 34.7 0.0 0.0 0.0 Price escalation 100.2 58.1 158.3 0.0 0.0 0.0 Installed cost 434.9 243.6 678.4 87.3 35.7 123.0 Working capital 10.4 1.2 11.6 4.8 0.0 4.8 Project cost 445.3 244.7 690.0 92.1 35.7 127.8 Interest during construction 6.0 0.0 6.0 0.0 0.0 0.0 Front-end fee Total financing required 451.3 244.7 696.0 92.1 35.7 127.8 Notes: 'Actual cost' include duties, taxes and price escalation under the respective categories of expenditures. 'Interest during construction' is included in 'pre-operating expenditures'. - 20 - Project Financing Plan US$ nmillion Original Revised Actual A. Equity 348.0 98.0 63.9 Government of India 215.8 N.A. N.A. CIL cash generation 132.2 N.A. N.A. B. Long-term debt 348.0 98.0 63.9 IBRD 248.0 57.7 55.3 Government of India 85.8 26.1 2.5 ODA 14.2 14.2 6.1 Total financing 696.0 196.1 127.8 Note: The revised projection was made after Coal India had decided to cancel US$190.3 million of the Bank loan. Allocation of the Bank Loan US$ rnillion Category Original Revised Actual AmQunt liercent Animunt Percent Amount Percent Mining Equipment 169.5 68.4 50.0 86.6 54.5 98.5 Washery 60.8 24.5 0.0 0.0 0.0 0.0 Technical assistance 2.0 0.8 2.0 3.5 0.8 1.5 Front-end fee 0.0 0.0 0.0 0.0 0.0 0.0 Unallocated 15.7 6.3 5.7 9.9 0.0 0.0 Total 248.0 100.0 57.7 100.0 55.3 100.0 Note: The revised projection was made after Coal India had decided to cancel US$190.3 million of the Bank loan. - 21 - F. Project Results 1. Economic impact Operating Costs Rs per ton Projection Actuals 1984/85 terms 84/85 89/90 89/90 Wages 94.7 76.5 89.8 Stores 27.8 28.3 28.5 Power 11.1 11.2 13.4 Other operating expenses 20.4 18.8 27.0 Operating costs 154.0 134.8 158.7 Depreciation 17.3 21.9 18.8 Interest 16.5 19.9 14.3 Total Production Cost 187.8 176.6 191.8 - 22 - Economic Cost /Benefit Streams Rs million 1983/84 terms Fiscal Year Production Capital Operating Working Net sales Net flows cost cost capital revenues 1984/85 0.04 190.4 5.6 16.6 -179.4 1985/86 014 98.6 29.5 58.8 -69.3 1986/87 0.44 280.2 40.2 3.6 180.1 -143.8 1987/88 0.80 306.0 61.8 7.2 330.8 -44.2 1988/89 1.02 -40.1 99.3 12.5 422.3 350.6 1989/90 1.22 161.7 112.1 4.3 505.1 227.0 1990/91 0.93 58.9 60.4 -17.2 383.4 281.4 1991/92 0.61 30.3 49.3 -3.7 253.8 177.9 1992/93 0.66 66.7 48.4 -0.3 273.7 158.9 1993/94 0.87 7.2 71.6 7.7 360.2 273.7 1994/95 2.00 64.3 149.7 26.0 828.0 588.0 1995/96 2.50 64.9 172.6 7.6 1035.0 789.9 1996/97 2.50 19.7 172.6 1035.0 842.7 1997/98 2.50 50.8 172.6 1035.0 811.6 1998/99 2.50 10.7 172.6 1035.0 851.7 1999/00 2.50 19.0 172.6 1035.0 843.4 2000/01 2.50 15.2 172.6 1035.0 847.2 2001/02 2.50 -236.2 172.6 -47.7 1035.0 1146.4 Economic rate of return: 38.55% Notes: The financial cost streams (see the following table) have been converted into economic cost streams using the following conversion factors: Indigenous capital goods: 0.8; indigenous capital goods with import content: 0.84; revenue expenses: 0.72; Australian coal was used to compute the economic border price for coal. - 23 - 2. Financial impact Financial Cost /Benefit Streams Rs million 1983/84 terms Fiscal Year Production Capital Operating Working Net sales Net flows 0Qt os capital revenues 1984/85 0.04 224.0 7.8 7.0 -224.8 1985/86 0.14 116.0 40.9 24.0 -132.9 1986/87 0.44 329.6 55.8 5.0 81.5 -308.9 1987/88 0.80 359.9 85.9 10.0 147.2 -308.7 1988/89 1.02 -47.1 137.9 17.3 205.4 97.4 1989/90 1.22 190.2 155.7 6.0 229.8 -122.1 1990/91 0.93 69.2 83.9 -24.0 162.5 33.4 1991/92 0.63 35.6 68.5 -5.1 116.4 17.4 1992/93 0.61 78.5 67.2 -0.4 129.6 -15.6 1993/94 0.66 8.5 99.4 10.7 175.7 57.0 1994/95 0.87 80.4 207.9 36.1 414.0 89.6 1995/96 2.00 81.1 239.7 10.6 517.5 186.1 1996/97 2.50 24.7 239.7 517.5 253.1 1997/98 2.50 63.5 239.7 517.5 214.3 1998/99 2.50 13.4 239.7 517.5 264.4 1999/00 2.50 23.8 239.7 517.5 254.0 2000/01 2.50 19.0 239.7 517.5 258.8 2001/02 2.50 -295.3 239.7 -66.3 517.5 639.3 Financial rate of retum: 6.91% Comparison of economic and financial rates of return Projections at CurTent appraisal projections Jharia Block II Economic rate of return 28.2 38.6 Financial rate of return 12.0 6.9 - 24 - The following table shows a comparison of projected and actual trends of Indian coal prices: Average coal prices in India, 1984/85 to 1989/90 Rs per ton Indian fiscal year Projections a/ Actual 1984/85 192.2 188.2 1985/86 212.8 190.9 1986/87 230.9 202.8 1987/88 250.5 215.0 1988/89 271.8 252.3 1989/90 294.9 273.7 1990/91 320.0 268.2 1991/92 345.0 306.9 1992/93 366.0 362.9 Notes: a/ coal price projections at the time of appraisal. 3. Social impact LAND ACQUISITION AND RESETTLEMENT. Implementation of the project affected 711 families or 4266 persons (assuming a household consists on average of six persons). All of these families owned land, houses or both on the land required for the mine. No socio-economic survey had been prepared at the time of appraisal, and there is no record of the number of landless people that could have been affected by the project. However, BCCL will be asked to carry out such a survey to assess the remedial rehabilitation needs of all people affected by the project under the proposed Coal Sector Rehabilitation Project. As far as the Jharia Coking Coal Project is concerned, BCCL informed the Bank that it has up to now resettled 160 families (or 960 people). BCCL has built two resettlement sites, complete with infrastructure facilities and civic amenities, to house all project-affected people, and provided employment for 247 project affected people. At this point, a deadlock has been reached since the remaining 551 project-affected familics (or 3306 people) refuse to vacate their houses on the project site unless BCCL offers employment to every person above 18. Making such an offer would put a heavy financial burden on an already financially poorly performing project and company. BCCL has a significant overstaffing problem. Considering that jobs with the coal industry pay about 8-10 times the minimum wage and are very secure, further additions to BCCL's payroll over and above the company's needs would just add to its losses. Within the surface area of the mine., seemingly insoluble land acquisition problems, caused by the continued refusal of landowners and tenants to vacate their land and properties, have caused considerable fragmentation of the planned mining areas and have necessitated major redesign of the mine itself. Clearly, one of the more important lessons to be learnt from the implementation of this component is that land acquisition and resettlement issues need to be resolved before the Bank commits itself to support a project. At a minimum, a rehabilitation action plan reflecting the - 25 - agreements reached with project-affected people needs to be available before the Bank becomes involved in a project. At the time this project was appraised, BCCL could point out to the Bank that effective mechanisms (in form of CIL's resettlement and rehabilitation policy and the various legal provisions under which land is acquired in India) were in place to successfully complete land acquisition and resettlement for this project. The rather successful experience with land acquisition and resettlement under the Dudhichua Coal Project gave the Bank little reason to doubt the effectiveness of BCCL's approach to land acquisition. In retrospect, it is easy to see that landowners and other project-affected people gained through the Bank's involvement in the project additional leverage to press their demand for employment with BCCL. (Earnings in the coal industry are about 8-10 times the minimum wage, and most project-affected people prefer this to any other form of compensation). Thus, CL's decision to seek the Bank's support for this component before concluding the land acquisition and resettlement process was a significant, if not the major factor behind the implementation delays and unsatisfactory results of this project component. (This was again borne out under one of the project components of a follow-up project, the Coal Mining and Coal Ouality Improvement Project. Under this project the development of the Sonepur-Bazari opencast mine was delayed by more than six years due to land acquisition problems). 4. Studies As part of the project the following studies had been prepared: - 26 - Study Purpose as Defined at Status Impact of study Appraiaal Shaft Sinking To assist CIL and BCCL Completed The shaft sinking and in particular, to improve armouring operations the design, engineering have been conducted and implementation of with assistance and shafts 500-600 m deep guidance of KOPEX, Poland. The manpower at the project has been trained and the experiences have been documented for future reference Management To assist CIL group to Completed Further geological Practices in Moonidih improve the operational design of Pootkee Mine and Planning, efficiency of fully Bulliary was carried out design and mechanized underground based on which the management of fully mines, with particular project was redesigned mechanized, Pootkee reference to the Pootkee Bulliary Mine Bulliary and Moonidih mines in the Jharia coalfield Alternative modes of To determine the most Completed The cost benefit analysis transporting sand to economic and technically of various modes of Jharia coalfield from feasible mode of transport was researched Maithan and transporting sand to be and this study will help Durgapur used for stowing in in investment decisions Jharia coalfield as and when the need arises Study of disposal To assess erLvironmental Incomplete The study area for project Mahduband impact and plan for dumping was not Washery dumping rejects from the identified; the washery washery project was not completed - 27 - G.Status of Covenants Agreement Section Description of Covenants Status LA 2.02(b) GOI to maintain special account in dollars Complied LA 3.01(b) GOI relending to CIL under terms acceptable to the Bank (not less Complied than 13.25%; repayment 15 years, including 5 years grace period LA 3.05 Borrower will initiate, by June 30 1986, a shaft sinking study: ex- Complied change views with the Bank and implement study recommendations LA 3.06 Borrower shall issue all necessary approvals for carrying out Complied Pootkee Bulliary washery LA 3.07 Audit: special accounts (due within 6 months of fiscal year end) Complied Amended LA 4.01 Borrower shall periodically review coal prices t ensure CIL Complied financial viability and progressive mobilization of financial resources to cover an increasing part of coal sector capital expenditure PA 2.02 CIL to onlend to BCCL under financial agreement Complied PA 2.07 CIL/BCCL to ensure project accords due regards to Complied ecological/environmental safety standards PA 2.08 BCCL to submit schedules for housing and services by June Complied 30/December 31 1988 and carry out that schedule PA 2.09 BCCL to provide training report for part B(iii) of projects on July 1, Complied annually PA 2.11 BCCL to take actions to secure all land for project Complied: land acquisition problems persist PA 2.12 BCCL to complete implemenution manuals Complied PA 2.13 BCCL to carry out further geotechnical testing on Block 11 Complied PA 2.14 BCCL to review studies with Bank and implement findings Complied PA 3.03 CIL/BCCL to take out insurance in amounts consistent with Complied appropriate practice PA 4.02 Audit: CIL and BCCL (due within nine months for CIL and six Complied months for BCCL) PA 4.03 CIL to ensure consolidated intemal cash generation is at least 1.3 Complied times debt service requirements. CIL/subsidiaries not to incur debt if debt/equity ratio exceeds 60/40. CIL/subsidiaries maintain a ratio of current assets/liabilities of not less than 1.2 - 28 - H. Use of Bank resources Stage of Project Month Number Day Specialization Performanc Type of Problen Qcle /Year of in Represented Ratin Field statuLs/b Persons Through appraisal Appraisal through Board approval Board approval through effectiveness Supervision 1 Oct 85 3 1 1 Economist 2 Slow progress. Engineer Pootkee Bulliary 9 Consultant months behind schedule Supervision 2 Feb 86 3 19 Economist 2 Engineer Financial Analyst Supervision 3 Aug 86 2 10 Engineers (2) 2 Slippage on sand and stowing and in main shaft sinking activities Land acquisibon and procurement delays Super-vision 4 Dec 86 2 12 Engineers (2) 2 Supervision 5 May 87 4 13 Economist 2 Engineer Procurement Financial Analyst Supervision 6 Oct 87 5 21 Economist 2 Engineers (2) Financial Analyst Consultant Supervision 7 Jun 88 4 22 Economist 2 Engineers (2) Financial Analyst - 29 - Stage of Project Month Number Days Specialization Perforrnance Type of Problems Cycle /Yea of i Represented Rating Field status/b Persons Supervision 8 Jan 89 1 14 Engineer 2 Land Acquisition delays Non compliance with financial covenants Supervision 9 Aug 89 5 15 Economist I Engineers (2) Financial Analyst Consultant Supervision 10 Feb 90 5 30) Economist I Engineers (2) Financial Analyst Project Officer Supervision 11 Aug90 3 22 Economnist 1 Engineers (2) Supervision 12 Feb 91 3 14 Econornist 1 Engineers (2) Supervision 13 Oct 91 4 16 Economist I Engineers (2) Operations Analyst Supervision 14 Jul 92 4 18 Economist I Engineers (2) Operations Analyst Supervision 15 Mar 93 3 16 Engineers (2) 1 Land acquisition Operations Equipment stoppages Analyst (erratic power supply) Spontaneous combustion of mine face COMMENTS. Overall, the scope and intensity of supervision seemed to be adequate, in particular in light of the considerable amount of technical assistance. Management at the subsidiary level and the project site were interested in the comments made by Bank supervision missions and receptive to their recommendations. - 30 - Annex 1.1 COAL INDIA LIMITED: INCOME STATEMENTS COAL INDIA LIMITED INCOME STATEMENT 80/81-92193 Rs million 80/81 81/82 82/83 83/84 84/85 85/86 86/87 87/88 88/89 89/90 90/91 91/92 92/93 Coal production (rnillion tons) Underground production 61 63 61 61 61 60 60 59 61 60 57 57 58 Openpitproduction 40 46 54 60 70 74 85 100 110 119 133 147 153 Total production 101 109 115 121 131 134 145 159 171 179 190 204 211 Saleableproduction 94 102 110 116 126 129 139 154 165 171 184 200 207 Oms (ton): ug I I I I 1 1 1 1 1 1 1 1 1 Oc 2 2 2 2 2 2 2 3 3 3 3 4 4 Total I 1 1 1 1 1 1 1 1 1 1 1 1 Ems(rs) 50 55 59 79 85 91 107 108 140 146 154 171 202 Revenues Averageprice(rs/ton) 121 138 156 160 188 191 203 215 252 274 268 307 363 Sales revenues 11,313 14,018 17,064 18,624 23,636 24,564 28,176 33,033 41,595 46,868 49,360 61,357 75,122 Contributiontocpra 0 0 428 -428 0 484 298 -598 -366 0 0 0 416 Total revenues 11,313 14,018 16,636 19,051 23,636 24,079 27,878 33,632 41,961 46,868 49,360 61,357 74,706 Production costs Salaries & wages 6,860 7,650 8,542 11,708 12,620 13,320 15,497 15,976 20,610 21,208 22,253 24,788 29,008 Overhead 537 589 753 940 887 1,083 1,347 1,536 1,722 2,208 2,544 2,826 3,653 Stores 1,524 2,056 2,602 3,015 3,336 3,800 4,419 4,998 5,705 6,738 7,739 9,302 11,076 Power 541 747 968 1,187 1,437 1,705 2,087 2,360 2,734 3,167 3,707 4,433 5,284 Transportation 293 404 462 452 503 511 803 1,405 1,048 1,323 1,123 1,577 2,120 Other costs 429 681 871 1,043 1,359 2,461 2,190 2,510 3,230 2,863 3,824 4,679 5,506 Total operating costs 10,183 12,127 14,198 18,344 20,141 22,879 26,342 28,785 35,050 37,505 41,189 47,604 56,646 Depreciation 735 991 1,344 1,716 2,070 2,500 2,935 3,489 4,014 4,429 5,364 6,274 7,264 Interest 623 805 1,110 1,324 1,733 2,158 1,501 2,921 2,600 3,402 4,467 5,331 6,841 Totalproductioncosts 11,540 13,922 16,652 21,384 23,944 27,537 30,778 35,195 41,664 45,337 51,019 59,210 70,752 Productioncost/ton(rs) 123 137 152 184 191 214 222 229 253 265 277 296 342 Other income -59 -43 -42 -136 -526 -629 -455 -708 -539 -762 -650 -265 -620 Cmpdiprofitbeforetax 3 4 5 12 10 16 12 14 24 24 21 21 25 Tax on cnpdi profit 1 2 3 4 5 4 6 5 5 6 Cmpdi profit after tax 3 4 5 10 7 16 8 10 20 18 16 17 19 Profitfromis.Yard/dcc 31 44 28 26 11 18 8 -243 -233 -447 Profit before tax -284 56 -53 -2,427 -781 -4,042 -3,317 -2,247 -199 801 -2,532 1,671 2,913 Tax 0 0 5 2 3 0 4 14 38 41 5 5 6 Net income -284 56 -58 -2,429 -783 -4,042 -3,321 -2,260 -236 760 -2,536 1,666 2,907 - 31 - COAL INDIA LIMITED BALANCE SHEETS 80/81-92193 Rs million 80/81 81/82 82/83 83/84 84/85 85/86 86/87 87/88 88/8 89/90 90/91 91/92 92/9 Assets: Cash&bank 773 727 1,075 2,352 1,218 1,187 1,417 1,424 1,617 2,299 2,917 1,463 1,866 Coal stock 2,518 2,918 3,605 4,179 5,242 4,702 5,302 5,805 8,042 8,923 10,215 14,281 16,911 Stores & spares 1,571 2,247 2,821 3,425 3,764 4,030 4,413 4,748 5,062 5,713 6,582 6,953 7,556 Sundry debtors 1,340 1,76B 2,224 3,758 3,731 3,950 4,608 7,227 9,885 14,419 14,338 13,903 20,845 Others 305 519 658 789 1,250 1,386 3,501 3,828 3,750 4,328 5,664 6,478 7,017 Total cur.Assets 6,507 8,179 10,383 14,502 15,205 15,255 19,241 23,032 28,356 35,682 39,716 43,078 54,195 Gross fixed assets 12,393 15,390 20,862 26,144 32,103 40,378 47,011 55,034 64,340 75,069 89,172 104,238 119,024 Less acc. Depreciation 4,213 5,328 6,992 8,724 11,275 14,087 16,612 20,199 24,259 29,005 34,806 41,247 48,539 Net fixed assets 8,179 10,062 13,870 17,419 20,828 26,292 30,399 34,835 40,081 46,064 54,366 62,991 70,486 Capitalw.lP. 2,455 4,115 5,114 6,720 7,866 8,341 11,796 14,437 18,242 21,338 21,245 23,731 27,019 Loans & advances 5,497 4,679 5,431 7,147 7,913 7,363 6,690 6,031 5,846 7,184 10,079 8,859 10,229 Total assets 22,639 27,035 34,798 45,788 51,811 57,250 68,126 78,334 92,525 110,268 125,406 138,659 161,929 Liabilities: Sundry creditors 4,004 4,594 5,152 7,998 4,324 3,670 3,816 3,631 3,094 3,449 3,637 4,246 5,089 Statutory liabilities 574 726 571 867 790 1,003 1,335 1,971 2,273 5,173 6,012 6,846 9,639 Othercurrentlia. 3,200 831 1,241 1,211 5,157 6,862 11,346 11,141 16,481 16,078 19,021 21,601 28,034 S.T.Debts 418 632 830 1,767 1,340 851 2,243 2,254 2,679 4,360 4,550 5,669 9,318 Total current lia. 8,196 6,784 7,794 11,844 11,611 12,386 18,741 18,997 24,526 29,060 33,221 38,362 52,079 Ltd:govt. 10,780 13,196 15,636 19,457 21,737 25,284 27,156 31,160 33,462 40,382 46,687 49,093 51,554 Cii Other liabilities 1,261 1,573 1,825 2,954 3,430 3,883 3,476 6,631 7,094 8,117 10,431 11,597 14,769 Total liabilities 20,237 21,552 25,255 34,255 36,778 41,553 49,373 56,788 65,082 77,559 90,339 99,052 118,402 Share holders' equity: Paid in capital 9,862 12,869 16,913 21,299 25,567 30,123 35,595 41,203 47,642 52,239 57,133 60,008 60,979 Retained earnings -7,460 -7,386 -7,370 -9,765 -10,534 -14,426 -16,842 -19,657 -20,199 -19,529 -22,066 -20,401 -17,452 Total Share holders'equity 2,402 5,483 9,542 11,534 15,033 15,697 18,753 21,546 27,443 32,709 35,067 39,607 43,527 Total liabilities 22,639 27,035 34,798 45,788 51,811 57,250 68,126 78,334 92,525 110,268 125,406 138,659 161,929 - 32 - COAL INDIA LIMITED FUND FLOW STATEMENT 80181-92J93 Rs million 80/81 81/82 82/83 83/84 84/85 85/86 86/8 87/88 88/89 89/90 90/91 90/91 92/93 Sources: Income before cpra -284 56 370 -2,856 -783 -3,558 -3,023 -2,859 -603 760 -2,536 1,666 3,323 Cpra 0 0 -428 428 0 -484 -298 598 366 0 0 0 -416 Depreciation 692 1,115 1,664 1,732 2,551 2,811 2,525 3,587 4,060 4,747 5.800 6,441 7,292 Ltdinterest 623 805 1,110 1,324 1,733 2,158 1,501 2,921 2,600 3,402 4,467 5,331 6,841 Gross i.C.G. 1,031 1,976 2,716 628 3,501 927 705 4,248 6,423 8,909 7,731 13,438 17,040 New equity capital 1,831 3,007 4,044 4,386 4,268 4,556 5,472 5,608 6,438 4,597 4,895 2,874 971 L.T.Loan 2,638 2,745 3,380 3,950 3,550 3.835 4,451 4,309 4,197 8,550 6,909 2,406 4.547 Increase in other liabilities 710 311 253 1,128 476 454 -407 3,154 464 1,023 2,314 1,166 3,172 Total sources 6,209 8,039 10,392 10,092 11,795 9,772 10,220 17,319 17,521 23,079 21,849 19,885 25,730 Applications: Investment 2,889 4,658 6,470 6,888 7,105 8,751 10,088 10,664 13,111 13,826 14,009 17,552 18,075 Debt service: Principal payment 0 888 939 313 1,086 289 2,578 305 1,895 1,630 603 0 2,086 Interestpayment 21 708 956 368 1,590 2,128 3,501 365 3,993 3,997 3,422 5,095 3,461 Decrease in other la. Inc. lnw.Capital 3,299 1,785 2,026 2,523 2,015 -1,395 -5,947 5,986 -1,478 3,627 3.815 -2,763 2,108 Total applications: 6,209 8,039 10,392 10,092 11,795 9,772 10,220 17,319 17,521 23,079 21,849 19,885 25,730 Ratios: Current ratio 0.79 1.21 1.33 1.22 1.31 1.23 1.03 1.21 1.16 1.23 1.20 1.12 1.04 Debt to equity ratio 0.82 0.71 0.62 0.63 0.59 0.62 0.59 0.59 0.55 0.55 0.57 0.55 0.54 Debtservicecoverageratio 1.00 1.26 1.41 0.26 1.08 0.23 0.15 0.78 0.96 1.19 0.90 1.47 1.79 - 33 - Annex 2.1 BHARAT COKING COAL LIMITED BHARAT COKING COAL LIMITED INCOME STATEMENT 80/81-92/93 Rs million 8ilLl 81ii2 82/83 83/84 84/85 85/86 86/87 87/88 88/89 89/90 90/91 91/92 92/93 Coal production (millon tons) Underground production 15 1 6 15 14 13 13 14 14 14 15 13 12 12 Openpitproduction 6 7 9 8 9 8 10 11 12 12 14 15 16 Total production 21 23 24 22 22 21 24 25 26 27 27 27 28 Saleable production 2;3 21 23 20 20 20 22 24 25 25 25 26 27 Oms (ton): ug 0 1 0 0 0 0 0 0 1 0 0 0 0 Oc 1 2 3 2 1 2 2 2 2 2 2 2 2 Total I I I I I I 1 I I I I I I Ems(rs) 51 56 59 79 88 98 107 110 144 150 154 176 205 Revenues Averageprice(rs/ton) 129 145 164 15 178 206 216 225 265 277 279 302 393 Sales revenues 2,582 3,075 3,732 3,034 3,653 4,085 4,792 5,358 6,616 6,994 7,111 7,827 10,696 Contribution to epra 0 0 -412 -213 -1,494 -1,101 -1,290 -1,718 -2,511 -3,339 -2,413 -3,320 -2,964 Totalrevenues 2,582 3,075 4,144 3,247 5,147 5,186 6,082 7,076 9,127 10,333 9,524 11,147 13,660 Production costs Salaries & wages 1,792 1,926 2,128 2,884 3,203 3,420 3,699 3,932 5,120 5,149 5,257 6,025 6,835 Overhead 170 183 223 237 252 286 353 420 424 585 538 699 830 Stores 336 472 578 547 583 648 682 803 872 909 931 1,190 1,426 Power 171 240 309 353 482 522 544 570 574 601 667 732 832 Transportation 131 165 168 119 115 152 203 231 261 336 238 287 385 Other costs 128 203 284 202 287 374 483 506 434 329 590 349 726 Total operating costs 2,727 3,188 3,691 4,342 4,923 5,402 5,964 6,462 7,684 7,910 8,221 9,282 11,035 Deprecation 140 183 264 320 413 409 503 610 746 772 906 1,006 1,187 Interest 133 219 288 389 424 533 279 710 553 696 1,009 1,188 1,656 Total production costs 3,000 3,591 4.242 5,051 5,760 6,344 6,746 7,782 8,983 9,377 10,135 11,475 13,878 Productioncost/ton 150 169 187 251 281 320 304 326 359 371 398 443 511 (rs) Otodrincome -33 22 62 -115 -288 -437 -212 -414 -195 -442 -351 -152 -521 Profit before tax -451 -404 -36 -1,919 -901 -1,594 -877 -1,120 -52 513 -963 -481 -738 Tax 0 0 0 0 0 0 0 0 0 0 0 0 0 Net income -451 -494 -36 -1,919 -901 -1,594 -877 -1,120 -52 513 -963 -481 -738 -34 - BHARAT COKING COAL LIMITED BALANCE SHEETS 80/81-92193 Rs million 80/81 81/82 82/83 83/84 84/85 85/86 86/87 87/88889 89/90 90/91 91/92 92/93 Assets: Cash&bank 270 179 79 131 215 149 303 335 3o1 276 206 101 364 Coal stock 879 980 1,236 836 918 888 1,451 1,650 1,999 2,691 3,621 4,106 4,854 Stores & spares 344 445 469 647 680 782 767 792 852 965 999 998 1,102 Sundry debtors 365 419 615 1,226 1,072 1,071 779 1,184 2,139 2,832 2,730 2,795 3,970 Others 4 5 4 7 330 198 178 161 33 61 137 205 509 Total cur.Assets 1,862 2,028 2,403 2,846 3,215 3,087 3,478 4,123 5,384 6,826 7,693 8,205 10,799 Gross fixed assets 2,633 3,353 4,765 5,822 7,305 8,574 9,691 11,304 12,393 14,067 15,808 17,436 20,148 Less acc. Depreciation 769 1,008 1,356 1,751 2,497 3,016 3,465 4,027 4,821 5,679 6,696 7,794 8,995 Netfixed assets 1,865 2,345 3,409 4,071 4,809 5,558 6,226 7,277 7,572 8,388 9,112 9,642 11,152 Capital w.I.P. 1,435 1,651 1,286 1,576 1,391 1,663 2,559 3,086 4,040 4,586 4,882 5,613 5,180 Loans & advances 880 1,060 1,619 2,479 2,534 2,696 2,390 1,844 1,746 1,834 2,109 1,976 1,965 Total assets 6,042 7,084 8,717 10,972 11,948 13,004 14,653 16,330 18,742 21,633 23,795 25,434 29,096 Liabilities: Sundry creditors 1,054 1,162 1,496 2,380 1,326 1,379 1,054 1,053 919 804 795 1,054 1,341 Statutory liabilities 134 249 172 135 48 211 283 622 644 1,604 1,464 1,076 1,270 Other current ha. 486 316 137 406 1,504 1,233 2,390 2,311 3,363 2,942 3,738 4,429 6,217 S.T.Debts 209 359 420 277 292 249 373 187 152 179 310 194 464 Total current ha. 1,883 2,085 2,224 3,198 3,170 3,071 4,100 4,173 5,078 5,530 6,307 6,752 9,292 Ltd: govt. Cil 5,425 6,756 6,389 9,580 11,481 13,172 13,121 15,946 15,399 15,980 17,358 18,294 20,156 Other liabilities Total liabilities 7,308 8,842 8,613 12,778 14,651 16,244 17,220 20,119 20,477 21,510 23,665 25,045 29,447 Share holders' equity: Paid in capital 1,657 1,658 3,500 3,500 3,500 4,500 6,044 6,044 8,150 9,500 10,476 11,220 11,220 Retained earnings -2,923 -3,415 -3,397 -5,306 -6,203 -7,739 -8,612 -9,834 -9,886 -9,377 -10,346 -10,831 -11,571 Total s.H'equity -1,266 -1,758 104 -1,806 -2,703 -3,239 -2,568 -3,790 -1,735 123 130 389 -351 Total liabilities 6,042 7,084 8,717 10,972 11,948 13,004 14,653 16,330 18,742 21,633 23,795 25,434 29,096 - 35 - BHARAT COKING COAL LIMITED FUND FLOW STATEMENT 80/81-92193 Rs million 80/81 LB2 W2m2 Lud WvM 86517 88M M 8P/&9 89/9D Wm1 ai 92122 2293 Sources: Income before cpra -451 -494 -449 -2,132 -2,395 -2,695 -2,166 -2,838 -2,562 -2,826 -3,375 -3,801 -3,703 Cpra 0 0 412 213 1,494 1,101 1,290 1,718 2,511 3,339 2,413 3,320 2,964 Depreciation 201 239 348 396 746 519 449 562 794 857 1,018 1,098 1,201 Ltd interest 99 184 244 356 394 500 264 658 513 694 1,009 1,064 1,682 Gross i.C.G. -151 -70 556 -1,168 238 -574 -164 100 1,255 2,065 1,064 1,681 2,145 Newequitycapital 1,000 1 1,842 0 0 1,000 1,544 0 2,106 1,350 976 744 0 L.T.Loan 482 1,331 -367 3,191 1,901 1,691 -52 2,825 -548 581 1,378 936 1,862 Total sources 1,331 1,262 2,030 2,023 2,139 2,117 1,329 2,926 2,814 3,995 3,418 3,360 4,007 Applications: Investment 527 935 1,047 1,347 1,299 1,541 2,014 2,140 2,043 2,220 2,038 2,358 2,279 Debt service: Principal payment Interest payment Decrease in other lia. Inc. In w.Capital 804 327 984 677 840 576 -685 786 771 1,776 1,380 1,002 1,728 Total applications: 1,331 1,262 2,030 2,023 2,139 2,117 1,329 2,926 2,814 3,995 3,418 3,360 4,007 Ratios: Current ratio 0.99 0.97 1.08 0.89 1.01 1.01 0.85 0.99 1.06 1.23 1.22 1.22 1.16 IMAGING Report No: 15238 Type: PCR