KOLKATA (miningweekly.com) – The Indian government has turned down a proposal for a higher salary package for the Coal India Limited (CIL) CEO position, which for the first time will be open for private sector executives.

The proposal, which came from the Coal Ministry, was aimed at bridging the substantial gap in average salaries of executives employed in government-owned companies and the private sector.

The Coal Ministry has issued an advertisement seeking candidates for the post of CIL CEO, which is currently held on a temporary basis by Coal Ministry additional secretary A K Dubey until December 25.

According to a Coal Ministry official, the Ministry felt that unless there was some parity between the compensation offered to the CEO of CIL and average salaries in the private sector, external candidates with the skills and experience necessary to run the group would not be enticed to apply for the job.

The compensation package determined by the government for the top CIL position averaged at around Rs 125 000 (about $2 000) a month, whereas it could be as much as 10 to 15 times more in the case of a CEO of a similar-sized private sector company, the official said.

The government has relaxed the norms for selecting a candidate for CIL and experience in mining or the coal sector was no longer mandatory. Wider managerial experience was required to run the company, which employed 350 000 workers.

The Coal Ministry’s efforts to widen the CEO search stemmed from new challenges the mining company faced, including rising domestic coal supply shortages and stagnating production at around 452-million tons a year.

At the same time, the new CEO would also have the task of managing new coal blocks, which the Supreme Court declared as having been allocated illegally.

The court last month declared that 214 coal blocks allocated to various companies were illegal and that these blocks would have to either be auctioned or handed over to CIL giving existing owners six months to wind up their operations.

Even as the government is keen to throw open the top CIL job for private sector executives, trade unions have opposed inviting “outsiders” to run the company.

The trade unions said that it was “irrational” to think that a private executive with experience of running a company with $800-million a year in turnover could head CIL, which had made $14-billion a year in revenue.