The losses would include cash loss, workers' wages, cess to be paid to the West Bengal government and pension fund. No official figures were available for the cash loss incurred so far. But sources put the cash loss at Rs 425 crore for the period April to October end this year.

Meanwhile, the West Bengal government as well as workers are upset with ECL's decision to retrench 71,000 employees and close down 55 underground and nine opencast mines.

Industry minister Bidyut Ganguly believes the ECL board was forced to take the hard decision by the union government, and this is yet another example of discrimination against the eastern region. However, a senior ECL official denied the allegation. "The centre has not forced us to take the painful decision. The ECL board itself took the decision based on economic,production, performance and other factors," he said.

The joint consultative committee of trade unions and management of the coal industry had its first meeting on October 29 and the next meeting will be held on November 16 to discuss the issue. ECL, which has the best coal grades in the country, has lost its biggest customers owing to high production costs and posted a Rs 547-crore loss in 1997-98. In earlier years, it had even higher losses -- Rs 655.21 crore in 1994-95 and Rs 779.49 crore in 1995-96.

For each of the last few years, ECL had earned the distinction of making the highest-ever loss in the country's corporate sector. Up to 1996-97, a part of ECL's losses were compensated by the coal price retention account (CPRA) and waiver of interest.

These benefits were withdrawn following the deregulation of coal prices. The ECL official said the company has to produce at least 35 million tonnes to 36 million tonnes to break even. But, right now, it is nowhere near hitting even this year's target of 32million tonnes. ECL authorities reckon that it can reduce its loss to Rs 329 crore if production goes up to 30 million tonnes, Rs 227 crore at 32 million tonnes and Rs 23 crore at 34.7 million tonnes. ECL has 120 operating mines, of which the 99 underground ones employ 90 per cent of its 1,53,000-strong workforce and contribute 47 per cent of its total production.

The 21 opencast mines, employing only 10 per cent of the manpower, yielded 53 per cent of its production. In some of the ECL mines, output per man shift (OMS) is as low as 0.16 tonnes, against an average of 0.42 at its underground mines and 1.93 in CIL mines as a whole.

Production cost at ECL's underground mines is around Rs 1,500 per tonne and at the opencast mines Rs 916 per tonne. In 45 underground mines, it spends more on salary and wages than it gets from coal sales.

Another factor that has priced out ECL is the cess charge by the West Bengal government. The state charges around Rs 500 per tonne on top grade coal ad valorem against theRs 135 fixed royalty charged by the Bihar government. The cess adds Rs 480 to each tonne of ECL's grade A coal, Rs 422 to grade B, Rs 370 to grade C and Rs 309 to grade D.

ECL has been pleading with the West Bengal government to either charge a lower royalty or waive the cess collection for two to three years. This will release additional revenues of Rs 300 crore to 400 crore per annum. But ECL officials admit that the withdrawal of the cess alone will not help it make profits. Nor will the downsizing.

"Cost of production has to be reduced, productivity has to be pushed up close to the CIL's average and, if required, even a wage freeze has to be imposed. There is no painless solution to ECL's survival," he said.