Coal India plans biggest tech overhaul to check rampant theft

Honeywell Automation India

13/01/2016 24:30

* To initially spend $52 mln on GPS tracking, other 
equipment 
    * Aims to check theft that can cost $1 bln a year; 20 pct of 
prodn 
    * New tenders for tech kit likely in March 
    * Wipro, Honeywell, Orange among those interested in bidding 
 
    By Krishna N. Das 
    NEW DELHI, Jan 13 (Reuters) - Coal India Ltd  COAL.NS  is 
making its biggest tech overhaul in four decades to check 
rampant theft and shed its image as an inefficient behemoth, 
spurred by an impending opening up of the sector to private 
firms for the first time since the 1970s. 
    The state-run company's monopoly had allowed it to delay the 
use of modern technology common in international mining, but it 
cannot afford to wait any longer as the government is set to 
soon announce a plan to allow private competitors like Adani 
Group  ADEL.NS  to mine and sell coal.  urn:newsml:reuters.com:*:nL3N14S2L3 
    Coal India's productivity is estimated at just one-eighth of 
its technologically advanced rivals in the United States, and as 
much as a fifth of its annual output is stolen, costing the 
company up to $1 billion each year. 
    Local "coal mafias" have fought for years to control rackets 
that prey on the industry and feed a vast black market. Tactics 
range from infiltrating unions and transport operations to 
bribery, extortion and outright theft of coal. (reut.rs/1OfEFLM) 
    Under Prime Minister Narendra Modi's government, Coal India 
has raised output at a record pace, helped by accelerated 
environmental clearances, though this has prompted criticism 
that the world's third-largest carbon emitter is not doing 
enough to check climate change. 
    To build on those output gains and meet a target to double 
production to 1 billion tonnes by 2020, Coal Secretary Anil 
Swarup is prioritising tech modernisation already implemented at 
Mahanadi Coalfields, a Coal India unit. 
    Swarup wants all seven of Coal India's producing units to 
use a GPS-based tracking system for their trucks and Google maps 
to electronically "fence" mining areas, which will alert 
managers if a truck diverts from its route. Swarup will review 
the units' preparedness this month. 
     
    LINING UP 
    The upgrade is expected to cost around 3.5 billion rupees 
($52 million) initially, but the attraction of working with the 
world's largest coal mining company and the promise of follow-on 
business is luring some major companies. 
    Indian software giants, including Wipro  WIPR.NS , as well 
as U.S. firm Honeywell  HON.N  and France's Orange  ORAN.PA , 
are lining up for contracts, with fresh tenders to be launched 
possibly by March, Mahanadi executive Deepak Srivastava said. 
    Azim Premji, the billionaire chairman of Wipro, India's 
third-largest software services exporter, recently met Swarup to 
offer some of the company's tracking technologies. 
    "This is Coal India's biggest technological overhaul, and 
its impact would be in billions of dollars," Swarup told 
Reuters. "The whole shift towards supplying quality coal to 
customers further increases the use of technology to avoid 
pilferage." 
    Last year, Mahanadi blacklisted third-party contractors of 
36 trucks, each carrying up to 17 tonnes of coal, after managers 
received telephone alerts of route violations that could have 
led to theft, said Srivastava. 
     
    CHANGING PERCEPTIONS 
    The tech overhaul may also help Coal India change 
perceptions that it's a slow-moving government giant, deterring 
investors from buying its shares despite its dominant position 
in a resource-rich and energy-hungry country.  urn:newsml:reuters.com:*:nL3N13L3U4 
    Other local firms such as CMC Ltd  CMC.NS , ARS Software 
Engineering and Arya Omnitalk Wireless Solutions have shown 
interest in bidding for contracts to supply Coal India with 
tracking and monitoring devices, including CCTV. 
    Srivastava said that when he joined Mahanadi in 2011 there 
were widespread discrepancies in weighing coal-laden vehicles, 
and un-monitored loading and offloading that encouraged theft. 
    The company has installed CCTV cameras at shipment sites, 
hooked up trucks with satellites and fitted them with radio 
frequency identification tags to automatically transfer data to 
a control room at the company's headquarters. 
    It is also replacing static electronic weigh-bridges with 
in-motion bridges that can gather data without trucks having to 
stop, easing delivery backlogs. 
    Srivastava said the measures have tightened control over 
errant truck drivers, and up to 90 percent of the coal mined is 
now weighed. 
    But there is still scope to improve. 
    "As of now, we can only detect route violations, but there 
should be a system so an alert goes out if the GPS is removed or 
tampered with," Srivastava said. "There should also be a way to 
ensure the weight of coal at the loading site and offloading 
site is the same." 
    ($1 = 66.7550 Indian rupees) 
 
 (Reporting by Krishna N. Das; Editing by Douglas Busvine and 
Ian Geoghegan) 
 ((Krishna.Das@thomsonreuters.com; +91-11-4178-1023, 
+91-98711-18314; Reuters Messaging: 
Krishna.Das.thomsonreuters.com@reuters.net, https://twitter.com/krishnadas56)) 
 
Keywords: INDIA COAL/