Coal India to acquire railway rakes for Rs 700 crore to boost supplies

Coal India to acquire railway rakes for Rs 700 crore to boost supplies

State-owned Coal India Limited (CIL) has decided to purchase its own rail wagons under the General Purpose Wagon Investment Scheme (GPWIS), a scheme which the railways announced last year in view of boosting up logistics support for general cargo.

Earlier, there were schemes for owning tankers and container wagons to carry special goods like petroleum, oil and other container cargo serving the ports.

However, the railways in April last year opened up for the general cargo movers and allowed owning rakes for movement of general goods.

Although there has been discussions making rounds in CIL about owning railway rakes, finally after more than a year of announcement of the scheme, CIL decided to own 40 rakes to boost up loading from the areas where production is expanding rapidly.

This would cost CIL around Rs 700 crore but having own rakes would assure that the coal monolith is able to push increased quantities of coal, especially to the power sector, through the rail mode and won’t have to opt for movement through road, which is not only costlier but environmentally hazardous too.

CIL’s maiden venture under GPWIS would also boost up supplies of domestic coal, which would reduce imports to some extend, a CIL official said, adding that the CIL board green flagged proposal of owning 40 rakes.

One rake comprises 59 wagons and each rake can move 1.4 million tonne of coal per annum.

With the internal rate of return being financially viable and attractive, CIL expects to realise its entire investment on the rakes within 12 years.

With the life of wagons spanning 35 years, it would be an asset creation for CIL, according to the coal major’s spokesperson.

In FY19, CIL, on an average, loaded 236 rakes per day which is expected to go up to 400 rakes per day in the coming years.

The company has set a target of increasing its production up to 1 billion tonne in the next few years and having own rakes will help offtakes to keep pace with the growth in production.

The rakes would initially ply in South East Central Railway between Jharsuguda-Nagpur and Katni covering IB Valley and the entire stretch of South Eastern Coalfields region.

Production in this region is expected to go up and this would cater to the demand of 15 thermal power plants in the SECR region.

SECR has the capacity to run more rakes, a company official said.

But CIL may seek changing the route for movement of rakes once in six months.

CIL has opted for the wagons of latest addition to the fleet of the Indian Railways, which have higher carrying capacity of 80 tonne each against the conventional 70 tonne.

Once the load bearing capacity of track increases, CIL wagons will load higher volumes per wagon.

Increase in rail transport of coal would offset the same quantity of road transport and rail being the cheaper mode, consumers would incur lower cost, a CIL official said.