+
SAIL Overspent Rs 25.4 Billion on Excess Coal Imports
COAL & MINING

SAIL Overspent Rs 25.4 Billion on Excess Coal Imports

Steel Authority of India Ltd (SAIL) exceeded permissible levels of imported coal usage between 2016 and 2023, incurring an additional expenditure of Rs 25.4 billion, according to a report by the Comptroller and Auditor General (CAG) of India.
The performance audit titled Inventory Management in SAIL revealed that SAIL's steel plants consumed imported coal beyond the internal norms set by management. The higher reliance on costlier imported coal, instead of domestic alternatives, significantly inflated the company’s expenditure.
The report, tabled in Parliament, also noted that SAIL did not set benchmarks for inventory carrying costs per tonne of raw materials, semi-finished, and finished goods, despite holding an average inventory of Rs 216.98 billion during 2016–17 to 2022–23—about 67 per cent of its current assets.
Further, due to poor stock maintenance of key raw materials like iron ore, coke, and sinter, blast furnaces at Rourkela, Bokaro, and Durgapur were forced into downtime, leading to a production loss of 932,000 tonnes of hot metal and a missed revenue opportunity of Rs 12.32 billion.
Non-moving inventory of stores and spares also rose sharply—from Rs 1.37 billion in 2016–17 to Rs 2.13 billion in 2022–23—an increase of 55 per cent, largely due to excess procurement without demand assessment. The report also found that in nearly 10 per cent of cases, the time taken from raising an indent to issuing a purchase order exceeded the six-month benchmark.
Of the targeted 119.66 million tonnes of saleable steel under the annual business plan (2016–2023), five integrated SAIL plants produced only 106.15 million tonnes—89 per cent of the target. Capacity utilisation during this period ranged from 77 per cent to 89 per cent.
Despite booking orders for 121.86 million tonnes, the despatches stood at only 93.75 million tonnes—77 per cent of the orders—leading to delays in stock clearance and increased inventory carrying costs at plant level.

Steel Authority of India Ltd (SAIL) exceeded permissible levels of imported coal usage between 2016 and 2023, incurring an additional expenditure of Rs 25.4 billion, according to a report by the Comptroller and Auditor General (CAG) of India.The performance audit titled Inventory Management in SAIL revealed that SAIL's steel plants consumed imported coal beyond the internal norms set by management. The higher reliance on costlier imported coal, instead of domestic alternatives, significantly inflated the company’s expenditure.The report, tabled in Parliament, also noted that SAIL did not set benchmarks for inventory carrying costs per tonne of raw materials, semi-finished, and finished goods, despite holding an average inventory of Rs 216.98 billion during 2016–17 to 2022–23—about 67 per cent of its current assets.Further, due to poor stock maintenance of key raw materials like iron ore, coke, and sinter, blast furnaces at Rourkela, Bokaro, and Durgapur were forced into downtime, leading to a production loss of 932,000 tonnes of hot metal and a missed revenue opportunity of Rs 12.32 billion.Non-moving inventory of stores and spares also rose sharply—from Rs 1.37 billion in 2016–17 to Rs 2.13 billion in 2022–23—an increase of 55 per cent, largely due to excess procurement without demand assessment. The report also found that in nearly 10 per cent of cases, the time taken from raising an indent to issuing a purchase order exceeded the six-month benchmark.Of the targeted 119.66 million tonnes of saleable steel under the annual business plan (2016–2023), five integrated SAIL plants produced only 106.15 million tonnes—89 per cent of the target. Capacity utilisation during this period ranged from 77 per cent to 89 per cent.Despite booking orders for 121.86 million tonnes, the despatches stood at only 93.75 million tonnes—77 per cent of the orders—leading to delays in stock clearance and increased inventory carrying costs at plant level.

Next Story
Technology

Six ways a smarter workflow leads to faster, more accurate bids

In today’s fast-paced civil construction environment, estimators need more than just solid numbers. They need smart, streamlined processes. This article explores six key ways connected workflows can transform the estimated approach, help in minimising risk, move faster, and improve accuracy. By integrating tools, data, and teams, one can produce stronger bids with less rework, fewer surprises, and more confidence. As an estimator, the job goes beyond producing numbers. They are responsible for delivering bids that are fast, accurate, and built to win. In today’s civil construction ind..

Next Story
Real Estate

Experion Launches Women-Only Co-Living Project in Greater Noida

Experion, part of Singapore-based AT Capital Group, has launched its first co-living space under its managed rental housing brand, VLIV, in Greater Noida. The all-women residence features 730 twin-sharing beds with a strong focus on safety, comfort, and well-being. VLIV has committed a $300 million investment to create a structured, service-led rental housing ecosystem in India. The brand aims to scale up to 20,000 beds in the next few years, with a long-term target of 100,000 beds nationwide. “India’s rental housing is fragmented. VLIV is our way of building long-term, dependabl..

Next Story
Infrastructure Urban

Officine Maccaferri Acquires CPT to Bolster Tunnelling Tech

Ambienta’s platform company, Officine Maccaferri S.p.A., has acquired CPT Group, a leading Italian developer of robotic prefabrication systems and digital control technologies for mechanised tunnelling. The move positions Maccaferri as a global player in integrated tunnelling solutions, blending traditional and advanced mechanised systems. Based in Nova Milanese, CPT serves major global contractors across Europe, Southeast Asia, and Australia. The company offers robotic prefabrication (Robofactory), productivity-monitoring software for Tunnel Boring Machines (TBMs), and eco-designed spa..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?