The SPV set up by Mahanadi Coalfields will facilitate construction of railway infrastructure to ease coal movement between mines and users. Time for Coal India to have its own rakes, and build designated rail tracks and corridors?
Only a few weeks ago, Anil Swarup, Union Coal Secretary, had mentioned that they have identified 50 railway projects that needs to be established so that India can eventually meet the projected target of 1000 million tonnes of coal. It is not only the production that matters, but, more importantly, the issue of evacuation of coal from pit heads so that they are able to reach this fuel supply to the desired destinations in time. Transportation logistics have been a great stumbling block and this bottle neck has to be overcome to achieve desired results.
From the current level of production at about 550 million tonnes, it is envisaged that, by 2020 coal production ought to reach 1000 million tonnes to meet the growing demand. It is a daunting target and needs herculean efforts and planning to achieve the same.
Mahanadi Coalfields Ltd (MCL) is one of the subsidiaries of Coal India Ltd, the output of which is expected to reach 127 million tonnes by end of March, this year, as against 110.4 mt achieved in 2013-14. This proposed increase is most likely due to the environmental clearance of some of the mines, by expansion, at Lakhanpur and Bhubaneswar and also the forest clearance in case of Bharatpur mines. CMD AK Sahay recently stated that MCL supplies coal to power companies in South India and Odisha, including NTPC, Talcher Thermal Power Station besides the aluminium maker, Nalco. MCL plans to reach 140 mt by 2015-16.
MCL, according to their website, has as many as 32 projects on hand, with various capacities, for which environmental clearances have been received, as early as 1990 and as late as December 2014. In the case of Sambalpur OCP, it has “consent to operate letters”, but the validity is upto only 31 March 2015. Only a few, like Kaniha OCP, Talcher UG, Nandira UG, Nataraj UG, Talcher (W) UG and Lakhanpur OCP have clearance up to 31 March 2016. These, it is hoped, will also be handled with care and expeditiously, so that the permits do not lapse!
In order to meet the ambitious projects on hand, Mahanadi Coalfields, has taken the lead, in response to the call made by the Coal Ministry, by signing an agreement with the Odisha Chief Secretary and the Union Coal Secretary to establish 2 special purpose vehicles (SPVs) - one each for Talcher and IB Valley. More details on these SPVs are expected shortly.
Briefly, however, it may be stated that this will facilitate the construction of railway infrastructure to ease coal movement between MCL and the public sector units under Indian Railways and the State Government. Under the SPVs, Railways are expected to acquire the land needed for SPVs. Discussions on these lines have been going on from as early as September 2012 but it is only now this has come to the agreement stage, so that work on these lines can commence.
MCL has made this serious move. It is in the interest of other successful subsidiaries of Coal India to follow suit and come forward to place orders for rakes on the wagon builders. Considering the incremental increase in production envisaged why not CIL project their needs for these rakes in the next five-six years, covering both domestic miners’ needs as well as those that would be required to move the imported coal. Power generators do not have much choice as they have to obtain their needs from imports that their production does not suffer.
It is time that Coal India plans and creates a SPV, to be named as Coal India Express Ltd, as an independent unit. Its main function will be to have its own rakes, build designated rail tracks and corridors, and most importantly, it needs to work out the logistics of rail, rake movement at night, without hindrance and delays, so that evacuation is as swift as the delivery at the point of discharge.
If necessary, as Railway Minister has often claimed that they lack funds, Government ought to consider and issue Railway Tax Free Bonds with attractive rate of interest, so that public can participate. Such Bonds will enable Railways also to go in for the much needed infrastructure development envisaged by them, so that they are well equipped to move upto 1,000 million tonnes in the years ahead.
MCL must also look seriously to obtain the most advanced, state of the art mining equipment, and do what it can to develop underground mines as well.
Coal Ministry wants 50 Rail Links to evacuate fuel from mines: Anil Swarup
The Coal Ministry has identified 50 rail projects to ensure evacuation of coal from the mines. “We have raised the issue to the Railway Board. I will be meeting the Railway Board chairman later this month to discuss the issue threadbare, following which financing options will be explored,” Coal Secretary Anil Swarup said on Friday at a seminar organised by MCC Chamber of Commerce and Industry in Kolkata.
According to him, the Centre is open to exploring the joint venture route for fast implementation of such projects.
Captive auction
Swarup said the designated authority would complete auction of 101 captive coal assets in three tranches, between March 23 and the third week of April this year. The assets include 42 operating mines. The rest of the assets are in different stages of development.
“For the assets which are in advanced stages of development, all the clearances granted to the existing allottees would be transferred towards the new operator of the block,” Swarup said. The Centre is expecting these 101 blocks to produce 350 million tonne (mt) of coal by 2020.
In the next phase, 103 assets (out of the 204 de-allocated by the Supreme Court) would be auctioned to captive users before March 2016.
Overall, the 204 blocks are expected to contribute 500 mt of annual production by 2020. This is over and above the one billion tonne per annum target set on Coal India (CIL).
“So far there is no plan to auction coal assets to commercial miners. The provision we created in the Coal Ordinance is an enabling provision,” he said. The Centre is also considering bringing transparency to the process of awarding coal linkages. ‘Linkage’ is an assurance granted by the Government to users for supply of coal by the national miner, CIL. In the past, such linkages were granted by a Standing Linkage Committee (SLC) chaired by the Additional Secretary and participated by bureaucrats of related industries.
The entire process was ad-hoc and was criticised by at least two former CIL chairmen. A host of such linkages were granted in the past ignoring caution from CIL board.
Only a few weeks ago, Anil Swarup, Union Coal Secretary, had mentioned that they have identified 50 railway projects that needs to be established so that India can eventually meet the projected target of 1000 million tonnes of coal. It is not only the production that matters, but, more importantly, the issue of evacuation of coal from pit heads so that they are able to reach this fuel supply to the desired destinations in time. Transportation logistics have been a great stumbling block and this bottle neck has to be overcome to achieve desired results.
From the current level of production at about 550 million tonnes, it is envisaged that, by 2020 coal production ought to reach 1000 million tonnes to meet the growing demand. It is a daunting target and needs herculean efforts and planning to achieve the same.
Mahanadi Coalfields Ltd (MCL) is one of the subsidiaries of Coal India Ltd, the output of which is expected to reach 127 million tonnes by end of March, this year, as against 110.4 mt achieved in 2013-14. This proposed increase is most likely due to the environmental clearance of some of the mines, by expansion, at Lakhanpur and Bhubaneswar and also the forest clearance in case of Bharatpur mines. CMD AK Sahay recently stated that MCL supplies coal to power companies in South India and Odisha, including NTPC, Talcher Thermal Power Station besides the aluminium maker, Nalco. MCL plans to reach 140 mt by 2015-16.
MCL, according to their website, has as many as 32 projects on hand, with various capacities, for which environmental clearances have been received, as early as 1990 and as late as December 2014. In the case of Sambalpur OCP, it has “consent to operate letters”, but the validity is upto only 31 March 2015. Only a few, like Kaniha OCP, Talcher UG, Nandira UG, Nataraj UG, Talcher (W) UG and Lakhanpur OCP have clearance up to 31 March 2016. These, it is hoped, will also be handled with care and expeditiously, so that the permits do not lapse!
In order to meet the ambitious projects on hand, Mahanadi Coalfields, has taken the lead, in response to the call made by the Coal Ministry, by signing an agreement with the Odisha Chief Secretary and the Union Coal Secretary to establish 2 special purpose vehicles (SPVs) - one each for Talcher and IB Valley. More details on these SPVs are expected shortly.
Briefly, however, it may be stated that this will facilitate the construction of railway infrastructure to ease coal movement between MCL and the public sector units under Indian Railways and the State Government. Under the SPVs, Railways are expected to acquire the land needed for SPVs. Discussions on these lines have been going on from as early as September 2012 but it is only now this has come to the agreement stage, so that work on these lines can commence.
MCL has made this serious move. It is in the interest of other successful subsidiaries of Coal India to follow suit and come forward to place orders for rakes on the wagon builders. Considering the incremental increase in production envisaged why not CIL project their needs for these rakes in the next five-six years, covering both domestic miners’ needs as well as those that would be required to move the imported coal. Power generators do not have much choice as they have to obtain their needs from imports that their production does not suffer.
It is time that Coal India plans and creates a SPV, to be named as Coal India Express Ltd, as an independent unit. Its main function will be to have its own rakes, build designated rail tracks and corridors, and most importantly, it needs to work out the logistics of rail, rake movement at night, without hindrance and delays, so that evacuation is as swift as the delivery at the point of discharge.
If necessary, as Railway Minister has often claimed that they lack funds, Government ought to consider and issue Railway Tax Free Bonds with attractive rate of interest, so that public can participate. Such Bonds will enable Railways also to go in for the much needed infrastructure development envisaged by them, so that they are well equipped to move upto 1,000 million tonnes in the years ahead.
MCL must also look seriously to obtain the most advanced, state of the art mining equipment, and do what it can to develop underground mines as well.
Coal Ministry wants 50 Rail Links to evacuate fuel from mines: Anil Swarup
The Coal Ministry has identified 50 rail projects to ensure evacuation of coal from the mines. “We have raised the issue to the Railway Board. I will be meeting the Railway Board chairman later this month to discuss the issue threadbare, following which financing options will be explored,” Coal Secretary Anil Swarup said on Friday at a seminar organised by MCC Chamber of Commerce and Industry in Kolkata.
According to him, the Centre is open to exploring the joint venture route for fast implementation of such projects.
Captive auction
Swarup said the designated authority would complete auction of 101 captive coal assets in three tranches, between March 23 and the third week of April this year. The assets include 42 operating mines. The rest of the assets are in different stages of development.
“For the assets which are in advanced stages of development, all the clearances granted to the existing allottees would be transferred towards the new operator of the block,” Swarup said. The Centre is expecting these 101 blocks to produce 350 million tonne (mt) of coal by 2020.
In the next phase, 103 assets (out of the 204 de-allocated by the Supreme Court) would be auctioned to captive users before March 2016.
Overall, the 204 blocks are expected to contribute 500 mt of annual production by 2020. This is over and above the one billion tonne per annum target set on Coal India (CIL).
“So far there is no plan to auction coal assets to commercial miners. The provision we created in the Coal Ordinance is an enabling provision,” he said. The Centre is also considering bringing transparency to the process of awarding coal linkages. ‘Linkage’ is an assurance granted by the Government to users for supply of coal by the national miner, CIL. In the past, such linkages were granted by a Standing Linkage Committee (SLC) chaired by the Additional Secretary and participated by bureaucrats of related industries.
The entire process was ad-hoc and was criticised by at least two former CIL chairmen. A host of such linkages were granted in the past ignoring caution from CIL board.
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