Singareni wants APGenco to share project cost

The proposed railway line from Kothagudem (Bhadrachalam Road) to Sattupalli in Khammam district has hit a roadblock.

The project, sanctioned in the recent Railway Budget, was a long pending demand to transport coal produced by Singareni Collieries Company Limited (SCCL). It is expected to cost Rs 337.5 crore.

The South Central Railway at a recent meeting with SCCL officials asked the coal company to bear about Rs 318 crore. SCCL, in turn wants, APGenco, the state-owned power generator, to share the cost.

APGenco, which is SCCL’s main customer, has entered into a fuel supply agreement with the latter for a coal linkage of 9.2 million tonne, the duration of which is also under negotiation.

“We are in talks with APGenco in this regard as they would have considerable savings,”' an official said.

The acquisition cost of the land — about 246 hectare — for the project is estimated at Rs 19.04 crore. Each kilometre rail line would cost Rs 6 crore.

SCCL is mining about 2.5 million tonne in the Sattupalli region since the road system cannot support more than this. But with the coming up of the railway line, this could go up to 6 to 8 million tonne, the official said.

The crushed run of mine coal - the coal coming out of the mine without any screening — is priced Rs 2,677.74 a tonne on the higher side for Grade A and at Rs 548 a tonne on the lower side for Grade G.

SCCL levies a surface transport charge of Rs 77 per tonne for transporting the coal from the pit head to the loading point that is less than 20 km. For distance more than 20 km, SCCL levies actual expenditure incurred towards repair and maintenance of roads leading to SCCL loading points. It levies Rs 17 a tonne for distance less than 3 km and Rs 44 for more than 3 km but less than 10 km.

The company levies an additional charge of Rs 17.5 per tonne when coal is loaded either into the railway services or into the purchaser’s own system of transport. “There are a lot of loose ends in the project. They need to be tied up first,” the official said.

The railway freight charges remain the same for a distance up to 100 km.

While the savings for APGenco, if the rail route is used, is yet to be worked out, for SCCL there would not be any additional gain as there is no sharing of freight revenues between the railways and SCCL. “We are yet to estimate the return on investments,” said the official.

The proposed rail route would originate at Kothagudem, go along Seethampet, Chandragonda, Bapanapalemm, Penuballi and end at Sattupalli. The new line is scheduled for completion by February 2013, provided land acquisition goes smooth. However, some of the land comes under the reserve forest area.

The line would also facilitate another new line from Bhadrachalam-Kovvur, which would reduce the distance between Kovvur and Vijayawada apart from spurring economic activity in the adjoining villages.