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Why can’t CIL invest in wagons and help Railways too?

Coal India could explore the possibility of buying wagons from the Indian Railways, and forge a mutually beneficial partnership that could lead to long-term benefits...

For the aam aadmi, the best and the cheapest means of transport is none other than the ones provided by the Indian Railways, who is supposedly India's largest employer, having a network covering over 65,000 kms, operating roughly 19,710 trains and ferrying 23 million passengers a day!
 

The Railways play a vital part in the movement of goods, both raw and finished, reasonably efficiently, on time and comparatively cheap.
 

The Indian coal industry depends upon the Railways to be able to move wagonloads of coal from pitheads to consumer sites. These are carried in specially made wagons, which are manufactured by Texmaco Rail, Titagarh Wagons, Cimmco and a few smaller units like Burn and Jessops. These builders also make special purpose wagons and tanks for corporate bodies.
 

Although the wagon builders received reasonable quantity of orders from Railways, the last order received was for 17,000 units way back in 2011-12 and to utilise their installed capacity, they have secured overseas orders, for various types of wagons, from Vietnam, Uganda, Senegal, Zambia to name a few. Yet, they have spare capacities that go waste.
 

The Railways have always played an important role in the development of the coal industry. For one thing, they are already building dedicated corridors for swift and guaranteed movements of coal; they are connecting links to ensure safe and timely arrival of wagons to receive imported coal, as indigenous production has to be supplemented as it is not adequate to meet the demand.
 

This is where Coal India can take one major step by placing substantial orders for wagons for delivery to Railways, on their account, which, the latter can make available at their beck and call. This will also reduce the financial strain on the part of Railways and, in return, they could offer concessional freight rates for movement of coal. Such a deal will be mutually beneficial. After all, Coal India has enough cash reserves to take this investment plunge, which has long-term benefits. Once this is successful, Coal India can make additional investments to get wagons made to meet other consumer demands and, with Railways collaboration, get a share in freight!


These wagon builders are also fabricators, and Coal India could have dumb barges made to carry coal where inland waterways exist, in addition to others in the field.

Source: Moneylife