HYDERABAD: The ‘profit-making’ Singareni Collieries Company Limited (SCCL) is in a difficult and paradoxical situation, as its management has been running from pillar to post to pay employees their salaries for the last 10 months. The SCCL clocked a net profit of Rs 1,765 crore in 2018-19, and recently gave its employees a massive bonus. But its financial situation is unhealthy.
Accumulated liabilities have been increasing and bonds have been redeemed. With the cash flow reduced, the SCCL is knocking on the doors of banks and other financial institutions for funds to pay employees’ salaries every month.
The main reason for the crisis is that gencos of four states are not paying for the coal they buy, and the biggest defaulter is TS Genco. According to leaders of employees’ unions, the Telangana government has to pay the SCCL Rs 9,600 crore, which includes dues for coal and the power used from its Jaipur power plant.
As per the SCCL’s balance sheet, as on March 31, 2019, the company’s total equity and liabilities stood at Rs 33,973.84 crore. Of this, liabilities alone were Rs 27,918.07 crore. The performance report of the SCCL for the month September, 2019 indicated that the dues from TS Genco, AP Genco, NTPC, Maha Genco and KPCL were Rs 2,656.93 crore. If the disputed amount due from KPCL of Rs 9.31 crore is included, the total dues to SCCL touch Rs 2,666.24 crore.
Some of these firms have not been paying their dues for even more than three years. With this, the SCCL, in its annual plan for the current year, has decided to further raise loans.“The total funding of Rs 1,850 crore of capital expenditure for 2019-20 BE was envisaged to be met from internal resources and from loans through financial institutions,” according to the SCCL plan.
“The SCCL announced a profit and gave employees a 28 per cent bonus. But its financial situation is not good. The state government alone has to pay it Rs 9,600 crore. If this trend continues, the SCCL may be declared as sick industry,” said Telangana Boggu Gani Karmika Sangham (TRS-affiliated) founder-president and now Singareni Collieries Karmika Sangh (BMS-affiliated) president Kengarla Mallaiah.
He added that fixed deposits have been exhausted and bonds redeemed.
The SCCL has been struggling to pay salaries, and the management is taking advances from banks and other financial institutions for this, Mallaiah said. He demanded that the State government pay its dues and protect the public sector undertaking in order to keep the employees from facing a bleak future.
The State government was using power produced by the Jaipur plant of the SCCL, but not paying for it. The Jaipur plant was producing 700 to 800 million units of power every month.
Despite repeated efforts, SCCL chairman and managing director N Sridhar and director (finance) N Balram were not reachable for comments.