Coal news and updates

Will wagon procurement solve CIL’s supply issues?

September 24: Coal Minister Piyush Goyal had announced that Coal India Ltd (CIL) has been given an in-principle approval to spend Rs 5,000 crore to procure 250 rakes in order to improve coal supplies from mines to consumption points, but questions are being raised whether the decision will indeed help the coal monolith.

Many in the industry feel that by just procuring wagons, CIL will not be able to improve its supply to consumers. This is so because, more than rakes, the coal miner is facing other problems that are related to deficient supplies of coal from its mines due to various reasons.

“Many mines of CIL do not even have rail connectivity. Also, there are mines which do not have railway siding. Additionally, CIL is facing immense problem in bringing coal from mines to loading points due to issues related with contractors who transport coal from mines to loading points,” an industry source said.

“In fact, in recent months, it was found that transportation of coal had become a major issue at South Eastern Coalfields Ltd (SECL) and Central Coalfields Ltd (CCL), because of issues related with fixation of rates with the associations of ex-servicemen, which are generally assigned the job,” the source added.

When contacted by ICMW to speak on the topic, former CIL Chairman N C Jha said procurement of wagons will definitely provide some edge to CIL, but may not be sufficient to address the issue in totality.

“Purchasing wagons could be one solution even as the railways have inducted quite a number of wagons over the last three-four years and wagon availability has been largely up to the requirement during the past few years,” Jha said.

“We had way back in 2010 suggested to the railways that we are ready to spare Rs 10,000 crore to them to procure wagons provided there is exclusivity provided to us to use those wagons to run between the two ends – that is the mines and the consumer or the power plants,” he said.

“But the Railways said that their policy does not permit this and if they buy on behalf of CIL, the freedom to run these rakes will be with the Railways,” Jha said.

“So, for CIL, there was no benefit. If it continues to be the same, there will be no benefit again. But if it is specific to Coal India, there will definitely be some benefit, though not to a great extent,” the former chairman said.

“The availability of rakes is not the sole hurdle. The major issue is non-availability of rail links in the major coalfields which are now producing and the projects that will come up in the coming years,” he noted.
There are talks going on about four major rail lines – North Karanpura, Ib Valley, Mand- Raigarh and Talcher – but not much of progresses has been done, he said, adding, “I think there have been no progress at all in the last three years on these major projects. 

Land acquisition is a major issue to everybody, including railways.

“Unless other issues are solved, inclusion of more wagons may solve some problem for some areas but it’s not going to offer any permanent solution. The permanent solution is linking the main trunk road, rails and linking the coalfields to the railways,” Jha said.