The SPV set up by Mahanadi Coalfields will facilitate construction of railway infrastructure to ease coal movement between mines and users. Time for Coal India to have its own rakes, and build designated rail tracks and corridors?
Only a few weeks ago, Anil Swarup, Union Coal Secretary, had mentioned that they have identified 50 railway projects that needs to be established so that India can eventually meet the projected target of 1000 million tonnes of coal. It is not only the production that matters, but, more importantly, the issue of evacuation of coal from pit heads so that they are able to reach this fuel supply to the desired destinations in time. Transportation logistics have been a great stumbling block and this bottle neck has to be overcome to achieve desired results.
From the current level of production at about 550 million tonnes, it is envisaged that, by 2020 coal production ought to reach 1000 million tonnes to meet the growing demand. It is a daunting target and needs herculean efforts and planning to achieve the same.
Mahanadi Coalfields Ltd (MCL) is one of the subsidiaries of Coal India Ltd, the output of which is expected to reach 127 million tonnes by end of March, this year, as against 110.4 mt achieved in 2013-14. This proposed increase is most likely due to the environmental clearance of some of the mines, by expansion, at Lakhanpur and Bhubaneswar and also the forest clearance in case of Bharatpur mines. CMD AK Sahay recently stated that MCL supplies coal to power companies in South India and Odisha, including NTPC, Talcher Thermal Power Station besides the aluminium maker, Nalco. MCL plans to reach 140 mt by 2015-16.
MCL, according to their website, has as many as 32 projects on hand, with various capacities, for which environmental clearances have been received, as early as 1990 and as late as December 2014. In the case of Sambalpur OCP, it has "consent to operate letters", but the validity is upto only 31 March 2015. Only a few, like Kaniha OCP, Talcher UG, Nandira UG, Nataraj UG, Talcher (W) UG and Lakhanpur OCP have clearance up to 31 March 2016. These, it is hoped, will also be handled with care and expeditiously, so that the permits do not lapse!
In order to meet the ambitious projects on hand, Mahanadi Coalfields, has taken the lead, in response to the call made by the Coal Ministry, by signing an agreement with the Odisha Chief Secretary and the Union Coal Secretary to establish 2 special purpose vehicles (SPVs) - one each for Talcher and IB Valley. More details on these SPVs are expected shortly.
Briefly, however, it may be stated that this will facilitate the construction of railway infrastructure to ease coal movement between MCL and the public sector units under Indian Railways and the State Government. Under the SPVs, Railways are expected to acquire the land needed for SPVs. Discussions on these lines have been going on from as early as September 2012 but it is only now this has come to the agreement stage, so that work on these lines can commence.
MCL has made this serious move. It is in the interest of other successful subsidiaries of Coal India to follow suit and come forward to place orders for rakes on the wagon builders. Considering the incremental increase in production envisaged why not CIL project their needs for these rakes in the next five-six years, covering both domestic miners' needs as well as those that would be required to move the imported coal. Power generators do not have much choice as they have to obtain their needs from imports that their production does not suffer.
It is time that Coal India plans and creates a SPV, to be named as Coal India Express Ltd, as an independent unit. Its main function will be to have its own rakes, build designated rail tracks and corridors, and most importantly, it needs to work out the logistics of rail, rake movement at night, without hindrance and delays, so that evacuation is as swift as the delivery at the point of discharge.
If necessary, as Railway Minister has often claimed that they lack funds, Government ought to consider and issue Railway Tax Free Bonds with attractive rate of interest, so that public can participate. Such Bonds will enable Railways also to go in for the much needed infrastructure development envisaged by them, so that they are well equipped to move upto 1,000 million tonnes in the years ahead.
MCL must also look seriously to obtain the most advanced, state of the art mining equipment, and do what it can to develop underground mines as well.
has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)