Coal news and updates

Rail Budget 2014: Railway links for coal supply of 300 mt may take 5 years

The Union budget's proposal to speed up construction of three critical railway lines may improve coal availability by about 300 million tonne, but officials say it will take at least five years to complete the projects and only a small fraction of the total 590 km will be completed by 2016.

An official of Coal India LtdBSE -1.82 % (CIL), the staterun miner which will use the proposed railway links to transport the coal, told ET, "The railways have told us that a portion of the 590 km will be ready in 2016 and rest of it will take five years. If the railways can meet the deadline, we will be able to supply some additional 300 million tonne in five years. If not, it may take longer to reach this figure." The budget proposed faster construction of Tori-Shivpur-Kathautia, Jharsuguda-Barpalli-Sardega and Bhupdeopur-Raigarh-Mand rail links.

"These projects, now estimated to cost at least Rs 8,000 crore, will be paid for initially by CIL, which in turn will claim the amount from the government," said the official on condition of anonymity.

The rail tracks are running several years behind schedule, a senior Railway Board official said. "The projects are facing delay due to environmental clearances. We are ready with the project work but delay in environment clearances is leading to time and cost overruns. We hope to start working on the project as soon as the clearances come." CIL officials say the company's expansion plans cannot take off in the absence of railway links, which are critical for transporting coal. "CIL is to spend the money and has already paid its initial sums, but the railway projects are far behind schedule," a senior CIL official said.

The 93-km Tori -Shivpur-Kathautia railway line in Bihar is a case in point, the official said, adding that the ground work on the track that was expected to handle 80 million tonne of coal every year started way back in 2000. "But 14 years down the line, it is nowhere near completion.

This railway track was envisaged to evacuate coal from new mining projects in North Karanpura mines of Coal India. CIL is in a fix. We cannot increase production from these mines because the coal produced has to be stacked up in the absence of a bulk transport.

Stacked coal has the tendency to catch fire, lead to loss," the official said According to the CIL official, railways has informed the company that the Tori-Shivpur section is likely to be completed by December 2016 at a cost of 3,200 crore while the Shivpur-Kathautia section is still awaiting the first-stage clearance from the environment ministry. The second section was originally estimated to cost Rs 621 crore, but owing to the delay it is now estimated to cost about Rs 1,000 crore, the official said, adding that CIL had already paid about Rs 150 crore to the railways for the project.

Another critical project for CIL, the 52-km Jharsuguda-Barpalli in Odisha is now scheduled to be completed by March 2016. The project has received stage-I clearance from the environment and forests and the survey work has just begun. The stage-II clearance and land acquisition are due. "

"It is not likely to be completed in the next two years and is now expected to cost Rs 1,000 crore for a single-track connectivity while initial estimate was Rs 470 crore. The cost will touch Rs 2,100 crore when the track is doubled," a CIL official said, adding that the project faced rehabilitation issues.

The third project envisages a total of 450-km railway tracks in three stretches in Mand-Raigarh Coalfields in Chhattisgarh, with an east corridor of 180 km, north corridor of 77 km and east-west corridor of 122 km. It is expected to handle 40 million tonne and come up towards the beginning of the 13th Plan period in 2017-18, the official said.

Source: The Economic Times