Coal news and updates

Rail budget brings hope for coal corridor

The railway budget has proposed speeding up construction of critical coal connectivity lines, which will not only bring 100 million tonne of incremental traffic to the railways but also help CIL to enhance production with evacuation facility in place.

The railway budget has proposed speeding up construction of critical coal connectivity lines, which will not only bring 100 million tonne of incremental traffic to the railways but also help CIL to enhance production with evacuation facility in place.

Union railway minister Sadananda Gowda placing his first budget said: “Railways will speed up construction of critical coal connectivity lines in Tori-Shivpur-Kathautia, Jharsugda-Barpalli-Sardega and Bhupdeopur-Raigarh-Mand area. This will bring nearly 100 million tonne of incremental traffic and will also facilitate faster transportation of coal to power houses.

A railway ministry official told FE that the Tori-Shivpur-Kathautia project was conceived way back in the late 90s while the Jharsugda-Barpalli-Sardega project was conceived in 2003-2004. The Bhupdeopur-Raigarh-Mand area project was conceived much later. Although the railways didn’t have any liability of funding the projects, delays mainly occurred because of problems in coordination between the rail and coal ministries as well as the state government concerned, mainly on issues relating to land acquisition.

While Coal India (CIL) would fund entirely the Tori-Shivpur and Jharsugda-Sardega projects, CIL, SECL and the Chhattisgarh government have formed an SPV to fund the Bhupdeopur-Raigarh-Mand project. The railway is functioning as the implementing agency.

A CIL director on the condition of anonymity said the UPA-II scheduled December 2016 as the completion date for the Tori-Shivpur and Jharsugda projects. The Bhupdeopur-Raigarh-Mand project would take more time. “But we are not aware about whether the railway ministry has rescheduled the dates,” he said, adding that the land required for implementing the projects is yet to come in the possession of the railways. “The Tori-Shivapur project has got stage-2 environment and forest clearance, Jharsugda is still pending over land issues and the SPV for the Bhupdeopur-Raigarh-Mand project is working on land acquisition and environment clearance,” the director said.

However, CIL initially estimated an investment of R2,000 crore for all three projects, which escalated to R7,000 crore by 2013. “We don’t know where the project cost will go but a mention of these projects in the rail budget is an indication that the railway ministry wants to complete them in a time-bound manner,” BK Saxena, CIL’s director marketing, said.

MoS for coal and power Piyush Goyal has been persuading Gowda to give priority to these projects ever since he took charge, a coal ministry official said.

The coal corridor projects in Jharkhand, Chhattisgarh and Odisha are significant for evacuating coal

from North Karanpura, Mand Raigadh and IB Valley mines, without which CIL will not be able to scale up operations in these fields.

CIL is unable to start a number of projects in IB Valley under Mahanadi Coalfields in Odisha and is missing out on 15% of the valley’s capacity due to lack of railway logistics.

CIL can produce an additional 11.2 mt per annum from IB Valley if evacuation is facilitated. IB Valley has untapped reserves of 75 mt and CIL has already undertaken new mining projects to lift at least 15% of the total reserves every year.

For the project in Chhattisgarh, revenue-sharing from freight charges would be based on equity holding. CIL will also invest R900 crore to create roads to link mines with the proposed railway tracks, a CIL official said.

Source: The Financial Express