This optimism of the ECL management is based on the fact that the company could surpass the monthly production target by 2.5 per cent in June and July and could reduce the cost of production substantially.

Many in ECL, however, believe that it is too early to be optimistic. "Until this growth trend in production is sustained, it cannot be said that the company is on the path of revival," they argue.

In March, 1997, too, the company surpassed its production target by 2.5 per cent. But, despite this success the company had a negative net worth during the end of 1996-97 fiscal and the company had to be referred to BIFR and in 1997-98 it suffered a staggering loss of over Rs 500 crore.

However, many inECL agree that a scope of financial restructuring proposed by Coal India could give some respite to the company in increasing the equity for coming out of BIFR. A loss of almost Rs 2 crore per day in the first two months of the current fiscal was about to doom the future of the company and the management had to go for emergency plans to check further increase in losses.

A senior official of the company said, "The consecutive growth trend shown by the company during the last two months resulting in reduction of losses have established that the company has started giving fruitful results."

The major factor in checking losses was the decision to go in for outright production from underground mines to fetch more revenue, he added. The underground mines were identified on the basis of technology used for production by increasing capacity utilisation of machinery.

The mining districts which had low productivity were merged to increase production and productivity. The heavy machines used for open castproduction have also been geared up for better capacity utilisation.

Steps were also taken to reduce cost of production. Work on Sundays in almost all the underground and open cast mines were stopped to avoid extra expenditure on overtime. Consumption of fuel and power have been restricted in all the areas. Mines which are loosing heavily and are not feasible for further mining have been identified for either closure or suspension of operation.

Three of the areas; Sitarampur, Satgram and Khottadih have been merged to reduce overhead expenditure. Offices of agents have also been reduced and steps are being taken to give more autonomy to the mine managers for ensuring better management.

ECL management has also plans to cut its manpower as a step to reduce the cost of production. "Any increase in salary gives tremendous impact to the exchequer of the company. During 1998-99, the company will have to pay its workers interim relief for the proposed next pay revision," he said.

The official said that thecompany can think of a breakeven only when there is substantial increase in production.

Hence, the company has offered voluntary retirement scheme under which the management expects to reduce its staff strength by at least 4,000 employees and another 4,000 employees will go via natural retirement.

In order to enforce discipline among the employees, vigorous attendance checks and resultant disciplinary actions against the defaulters have started, he said. Further regular fortress checking in different collieries have yielded results in identifying Badli workers specially at the loading points. Incentive schemes have also been introduced for those mines which are achieving their targets, the official added.