Coal offtake hit by rake scarcity

Coal India Limited (CIL) continues to grapple with inadequate supply of rakes by the Indian Railways which has hit the firm’s coal offtake especially during the second half of this fiscal.

Due to inadequate rakes, CIL’s coal offtake has been unable to keep pace with its production as a result of which the total stockpile of coal at the pitheads of its seven subsidiaries has now gone up to 43 million tonnes.

“During the second half of any fiscal especially in the last three months, CIL’s coal production goes up and we need 192 rakes per day for offtake of the raw material. However, the Indian Railways has failed to provide the required number of rakes to CIL which has affected our offtake”, a senior official of CIL told Business Standard.

“We have been constantly taking up the issue of availability of rakes for coal movement with the Indian Railways. The coal offtake woes can be overcome only after the proposed dedicated freight corridor becomes operational”, he added. The official pointed out that the Indian Railways could not provide the required number of rakes to CIL as its rakes were earmarked for transport of food grains and fertilisers. He said that the problem of coal offtake was more pronounced in the Mahanadi Coalfields Limited (MCL), one of the subsidiaries of CIL.

CIL’s coal production which is hit during the monsoon season picks up in the second half of any fiscal and reaches its peak during the last quarter (January-March). On an average, CIL’s coal production during January-March stands at around 1.6 million tonnes per day out of which the coal PSU (public sector undertaking) is able to secure offtake of about 1.3 million tonnes.

As CIL was scaling up its coal output target every fiscal, it needed more rakes to ensure that the coal offtake kept pace wit its rising production. CIL aimed at a production of 405 million tonnes by the end of this fiscal compared to 380 million tonnes in 2007-08. The coal PSU’s production target was projected at about 520 million tonnes by the end of 2011-12.