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
Real Estate

L&T Wins Mega Order for India’s Largest NVIDIA B300 AI Factory

Larsen & Toubro (L&T), through Vyoma.AI’s AI infrastructure subsidiary LTN Compute, has secured a mega order to develop what the company describes as India’s largest single-cluster AI infrastructure facility. The NVIDIA B300 AI Factory will support US-based AI cloud company Together AI’s platform for large-scale inference, fine-tuning and training workloads.The integrated AI Factory will be hosted at Vyoma.AI’s Chennai data centre campus and will have a capacity of 10,000 NVIDIA B300 GPUs. The platform will combine hyperscale data centre infrastructure, accelerated computing, h..

Next Story
Infrastructure Urban

Autodesk Elevates Nikhil Bagalkotkar to Lead AEC in India, SAARC

Autodesk has elevated Nikhil Bagalkotkar as Head – Architecture, Engineering and Construction (AEC), India and SAARC, with immediate effect.In his new role, Bagalkotkar will lead Autodesk's AEC business strategy across the region and drive adoption of the company's Design and Make platform. He will also focus on promoting digital design and construction technologies to help customers accelerate innovation and deliver more sustainable and resilient infrastructure.Bagalkotkar will be responsible for expanding Autodesk's AEC business, strengthening customer and partner engagement, and accelerat..

Next Story
Real Estate

Listed Developers' Pre-Sales Seen Rising 22.3 Per Cent in FY27

India's leading listed residential developers are expected to sustain strong sales momentum in FY27, with combined pre-sales of 11 major players projected to rise 22.3 per cent year-on-year, according to an analysis by ANAROCK Research & Advisory.Combined pre-sales of the developers are estimated to increase from Rs 1.49 trillion in FY26 to Rs 1.82 lakh crore in FY27. ANAROCK attributed the growth to sustained end-user demand, new project launches and strong execution despite higher property prices, construction costs and global uncertainties.Dr Prashant Thakur, Executive Director and Head..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement