In a first, state-owned miner Coal India Limited (CIL) has decided to buy 40 rakes for Rs 700 crore to enhance its evacuation capability by 56 million tonne (mt). This will not only give the company direct control to move coal to desired power plants, but also also help free up pithead stocks.
Moreover, as the availability of rakes increases, the maharatna public sector unit (PSU) could also enhance its allocation to non-power clients.
According to a company official, one rake comprises 59 wagons and a back-of-the-envelope calculation indicates that one rake can move 1.4 mt of coal per annum. The lifespan of these wagons is expected to be 35 years.
These new wagons have the capacity to carry 80 tonne of load, compared to the conventional load-carrying capacity of 70 tonnes.
However, initially, these wagons would not be able to function at the maximum load as the load bearing capacity of railway tracks is not sufficient.
With its internal rate of return being financially viable and attractive, Coal India expects to realise its entire investment on these rakes within a decade.
“During 2018-19, on the average, we loaded 236 rakes per day which is expected to climb up to 400 rakes per day in the coming years as the company has set about an ambitious plan to increase its production volume to 1 billion tonne in the next few years”, a company executive said.
“These rakes will be owned by Coal India and dedicated only to transport of our own coal. This will help us in pushing higher volumes of coal to the power sector”, the official added.
The procurement is being done under the General Purpose Wagon Investment Scheme, introduced by Indian Railways, which allows customers to own wagons for dedicated transport of their products.
Initially, the rakes would ply in the Jharsuguda-Nagpur and Katni zones of the South East Central Railway (SECR), and cover the entire Ib Valley area falling under the South Eastern Coalfields Limited (SECL). Here, production is expected to perk up, with the rakes catering to the demand from 15 power plants under SECL.
Coal India is of the view that the matrix of its growth in coal production SECL’s load carrying capacity is favourable for deployment of the proposed rail wagons.
After deployment, the world’s largest coal miner may seek changes in the routes of rakes once in six months.
According to the Coal India official quoted earlier, an increase in rail transport of coal will reduce the cost of logistics for consumers.
Last month, Coal Minister Prahlad Joshi had stated that there has been sporadic instances of resistance from local populations for the movement of coal through roads due to issues such as environmental concerns.