Coal news and updates

Cement-makers urge SECR to withdraw new rake allotment norm

April 16: The Cement Manufacturers Association (CMA) has urged South East Central Railway (SECR) to immediately withdraw its order introducing a “new offer and allotment system” for rakes to South Eastern Coalfields Ltd (SECL) and Mahanadi Coalfields Ltd (MCL).

“The new system, introduced unilaterally from April 1, 2014 even without holding any interaction with consumers’ representative bodies, would adversely impact the cement companies which have fuel supply agreements (FSA) with SECL and MCL,” the Secretary General of CMA, N A Viswanathan, said in a letter to Member (Traffic) of the Railway Board, seeking his intervention to withdraw the order.

The cement industry is heavily dependent on movement of coal under FSAs from Coal India Ltd as out of the total FSA quantity, 80% is accounted for by movement within the jurisdiction of SEC Railways and of this 80% as much as 63% of the coal is moved by rail, Viswanathan said.

The letter by the CMA secretary general was sent to the Railway Board after SEC Railways, on March 28, regulated the allotment of rakes on each siding of MCL and SECL in a particular day to six times of the average loading potential under priority ‘C’ coal under the system of “offer and allotment”.

According to these restrictions, SEC Railway will not accept the offer from SECL and MCL in case the pending allotments are more than the maximum limit of six times of the average loading potential, the letter said.

Viswanathan said that as per the new regulation, at such sidings, no offer by SECL and MCL will be admissible till the pending allotments are brought within the maximum limit of the pending allotment fixed for the siding on account of daily supply of the rakes by the division.

SEC Railway has directed that offers, if given by the SECL/MCL for those siding will be treated as excess offer and will be returned to the coal companies with the remarks ‘excess offer hence not considered’, the CMA’s secretary general said.

“Under the implementation of the new order and non-allotment of rakes against the sanctioned rail programmes by the Railway Board, Kolkata, our member cement companies will be compelled to transport coal by road to as far as 1,200 km and above, which would not be economically viable for cement-makers,” Viswanathan said.

At present, there is a backlog of about 100 industrial rakes to be supplied by the SEC Railways in the Korba coalfields of SECL. Incidentally, the Korba coalfield loads about 20 rakes per day and as such the backlog is equivalent to 5 day loading only.

As per information gathered from SECL, during the year 2011-12, the Korba coalfield had 917 backlog of industrial rakes which were supplied during the year.