**CAG Slams SAIL Over Excessive Use of Imported Coal, Flags Operational Inefficiencies**

The Comptroller and Auditor General of India (CAG) has strongly criticized the Steel Authority of India Limited (SAIL) for its excessive reliance on imported coal, raising serious questions about the public sector steel giant’s procurement strategy and operational efficiency.

In its recent audit report tabled in Parliament, the CAG pointed out that SAIL had over-consumed imported coking coal across its integrated steel plants, despite having access to substantial domestic coal supplies. This over-dependence not only led to unnecessary foreign exchange outflow but also contributed to higher input costs, which could have been avoided with better resource planning and management.

Findings of the CAG Report

The CAG observed that between the financial years 2016-17 and 2020-21, SAIL’s consumption of imported coal was significantly above the norms set by the company itself. While SAIL imports premium low-ash coking coal for metallurgical purposes, the report stated that the usage levels often exceeded the optimum blend ratio recommended for efficient steel production.

The audit highlighted that the blending ratio of imported to domestic coal was not maintained properly, leading to wastage of costlier imported coal. For instance, certain plants like Bokaro Steel Plant and Rourkela Steel Plant were found using up to 95% imported coking coal, which adversely impacted cost-effectiveness and profitability.

Economic Implications

India is one of the largest importers of coking coal, which is a key raw material in steel production. At a time when the country is aiming to reduce import dependence and encourage Atmanirbhar Bharat (self-reliant India), such inefficiencies by major PSUs like SAIL reflect poorly on policy implementation and financial prudence.

The CAG report emphasized that if SAIL had maintained optimal usage levels of indigenous coal, the company could have saved crores in foreign exchange and reduced its overall production cost. The audit further suggested that SAIL’s procurement policies need a strategic overhaul to align with national interests and internal efficiency goals.

Recommendations

The CAG has urged the Ministry of Steel and SAIL’s top management to take corrective measures. Key recommendations include:

* Strict adherence to the prescribed blending ratio.
* Enhanced use of domestic coal wherever feasible.
* Development of advanced coal beneficiation technologies to upgrade local coal quality.
* Regular audits and real-time monitoring of coal consumption at plant level.

SAIL’s Response

In its defence, SAIL attributed the increased usage of imported coal to fluctuations in domestic coal quality and supply issues. The company maintained that product quality and furnace efficiency sometimes necessitate higher-grade imported coal. However, the CAG has insisted that even with these constraints, a more efficient consumption strategy could have been implemented.

The findings of the CAG once again highlight the critical need for improved operational transparency and efficiency in India’s public sector undertakings. With rising global coal prices and increasing pressure to minimize imports, the ball is now in SAIL’s court to review its practices and adopt a more sustainable and cost-effective approach to coal procurement and usage.