Coal India to invest Rs 6,000 crore in railway track laying

Under pressure from the independent power producers, the PMO has asked Coal India Limited (CIL) to invest in laying railway tracks, to facilitate movement of coal to thermal power projects.

The CIL will now invest `6,000 crore in an SPV along with the Chhattisgarh Government, to enable coal supply from pitheads to at least 53 thermal power projects in the eastern zone.

The independent power producers are now going through a tough time, due to lack of environmental clearances holding up their allotted coal blocks and a very high cost of coal transportation.

When the PMO quizzed about the delay in coal supply sometime ago, the CIL had said that railways was unable to ferry all the coal from its pitheads.  

The railways, on the other hand, replied that it had augmented its efforts by more than 10 per cent in the two quarters last year but it was handicapped by lack of lines.

The independent power producers, however, have another problem. Most of the plants are coming up in Bihar, Chhattisgarh, Jharkhand and eastern Madhya Pradesh. Presently, most of these areas come under Western Railways, which is not willing to let go of commercial value of servicing the sector. So, even imported coal cannot land at ports in Odisha and West Bengal. It has to be transported from Gujarat or Nhava across most of central India to the east.

This, according to sources, is not feasible. “It will add at least 20 per cent to the cost of power for no reason at all,” says one source. So a ‘constructive way’ has been found by persuading the CIL to invest its surplus in an SPV, of which Chhattisgarh Government has also agreed to be a part.

The CIL will hold 64 per cent in the SPV, in which railways will also be a part and execute the project. The first project, being taken up by this SPV, has already started in the 450-km long Mand-Raigarh region of Chhattisgarh, which will connect coal fields in the state with Talcher in Odisha.