The logistics sector plays a key role in the transport of coal from one part of the country to another. Using the medium of railways, the sector helps in the evacuation of coal across states.
Prioritising the evacuation of coal in Chhattisgarh, Jharkhand and Orissa, Coal India Ltd (CIL) is keen on construction of three railway lines. This was propagated to the media at a time when the world’s largest coal miner is gearing up to enter into Fuel Supply Agreement with power producers following a presidential directive. Fuel Supply Agreement (FSA) mandates assuring 80% of the committed coal delivery to power projects, coming up mainly during the Twelfth Five-Year Plan (2012-2017).
S Narsing Rao, CMD of Coal India Limited has confirmed while speaking to the media that CIL’s priority will be the setting up of the railway lines.
According to a recent statement issued by the Prime Minister’s Office, CIL is expected to enter into FSAs for a total capacity of 50,000 mega watt (mw).
Speaking about the railway lines, Mr Rao stressed the railway lines being core to meet Twelfth Five-Year Plan power capacity addition, which is likely to be fixed at 1,00,000 MW. Thermal power is expected to contribute as much as 60% of the total target. Mr Rao elaborated that since around 240 MT of thermal coal is required to produce 60,000 MW of power, the completion of the three railway lines within a period of 2 years will help CIL in meeting the set target.
The world’s largest coal producer, CIL has set a target of 468.74 million tonnes (MT) for the year 2012-13. CIL accounts for over 80% of the domestic production. CIL has sought 193.3 rakes per day from the Railways for 2012-13, in order to drive the growth towards the target.
In a statement, CIL has indicated signing a memorandum of understanding (MoU) with the Ministry of Coal, for its key performance areas for 2012-13. Along side, CIL has coal off-take at 474.70 MT.
Already several dedicated freight corridors are been set up across India. According to Karandeep Singh Chandhok, director of M/S Akal Logistics India Pvt Ltd, a well known logistics service provider based in New Delhi, “Dedicated freight corridors are the need of the hour as they would cut down the time required to transport freight from the source to destination. In fact, dedicated freight corridors are precisely what the domestic freight scene needs at this moment to curb delays in supply chain.”
CIL will benefit from the new set-up through huge revenue and the nation will get increased coal supply. Indian Railways also stands to benefit by getting huge freight cost. In 2011-12, Indian Railways generated revenue worth Rs 68,965 crore from commodity wise freight traffic against Rs 62,300 crore during the corresponding period of the previous financial year. With Railways freight traffic posting a 5% growth in 2011-12 over FY11, Indian Railways is clearly looking at concentrating increasingly on freight. In 2011-12, Indian Railways handled a total of 969.78 MT of freight traffic, compared to 921.51 MT in the previous year.
Priyanka Roy Chowdhury