+
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.

Related Stories

Gold Stories

Next Story
Infrastructure Urban

Syrma SGS Elemaster Opens High-Reliability Electronics Facility

Syrma SGS Technology and Elemaster Group have inaugurated a new high-reliability electronics manufacturing facility in Bengaluru through their joint venture, Syrma SGS Elemaster Private Limited.The facility aims to strengthen India’s advanced electronics manufacturing capabilities and support customers across domestic and global markets, particularly in sectors requiring high quality, reliability and stringent manufacturing standards.Located in the Bommasandra Industrial Area, the 20,000 sq. ft. facility is equipped with advanced Surface Mount Technology (SMT), Through-Hole Technology (THT) ..

Next Story
Real Estate

UrbanVault Expands Chennai Workspace Portfolio with 100,000 Sq. Ft.

UrbanVault has expanded into Chennai with approximately 100,000 sq. ft. of managed workspace across three properties, strengthening its presence in India’s flexible workspace market.The company’s Chennai portfolio includes Olympia Teknos and UV IPL in Guindy, and Ceebros Chambers on Velachery Main Road. The expansion marks UrbanVault’s entry into its seventh city, taking its national footprint to more than 3 million sq. ft. across 80+ centres.UrbanVault expects its annual revenue to cross Rs 350 crore in FY27, supported by expansion across major business hubs and rising demand for manage..

Next Story
Real Estate

LML Realty Launches Digital Platform for Custom Factories

LML Realty has launched ‘Your Factory’, a digital platform that enables businesses to configure, customise and order built-to-suit factories online. The platform combines plot selection, factory specifications, pricing and development into a single digital interface.Businesses can select plot sizes ranging from 500 sq. yd. to 10 acres and customise requirements such as factory size, height, structure, crane provisions and power needs. The platform provides instant quotations, allowing users to view configurations and pricing while designing their facilities.Pricing for the built-to-suit fa..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code