RailEnquiry

In an ambitious step towards diversification, State owned CIL has ventured into the infrastructure sector with a 350 kilometer long rail network project which would interconnect three of its key reserves in Chhattisgarh, Jharkhand and Odisha.The network, slated to be completed in the next three years, is expected to cost around INR 6,000 crore and will be in collaboration with the Railway Ministry.Apart from better inter connectivity, the Maharatna company also hopes that the project would help augment its production capacity in the long run.CIL plans to levy haulage charges on its customers for the coal transported on these lines in order to recover its costs for the projects.Chhattisgarh, Jharkhand and Odisha together house around 300 million tonnes worth of coal and by providing smoother transportation to the coalfields situated in these States, CIL aims to address the problem of inadequate coal supply to thermal power generators by expediting the critical fuel’s supply to them across the country.Mr S Narsing Rao chairman of CIL said that the coal behemoth would be floating a special purpose vehicle in collaboration with Indian Railways and Chhattisgarh Government for laying a 200 kilometer long rail network connecting its coalfields in Mand to Raigarh region of that State.

Mr Rao said that the plan was finalized in a meeting held between Prime Minister’s Principal Secretary Mr Pulok Chatterjee, Rao, Railway Board Chairman Mr Vinay Mittal and top officials of the Coal and Environment Ministries on January 8th. CIL would have a 64% stake in the SPV for the INR 4,500 crore project, while Railway Ministry’s construction wing IRCON and the Chhattisgarh Government would jointly hold the remaining portion.

He said that the work on the project would start once environmental clearances as well as land acquisition works are completed.

Apart from this, a 100 kilometer rail track would also be laid for connecting CIL’s North Karanpura coalfields in Jharkhand and another line would be constructed for the PSU’s reserves situated in Odisha’s Ib Valley. This line would be around 60 kilometer long.

For both these lines CIL has formed an SPV with the Railway Ministry where the funding would be done wholly by the coal behemoth while the Railway Ministry would execute the projects.

CIL officials said that of all the three lines, the North Karanpura railway line would be the first one to be ready for use by 2015. Work on this line as well as the one in Odisha has already begun.

The mega diversification plan of CIL is in line with the PMO’s directive to it last year that being a cash rich entity, it should expand its operations in order to fulfill the needs of the power sector.

Official sources said that with the PMO taking special interest in the project, CIL too is keen to implement it quickly, as it would not only increase its production capacity in the long run, but would also improve extraction of coal from areas which are considered Naxal-infested.

Mr Rao said that CIL’s production target for the current fiscal is 464 million tonnes, which it hopes to achieve. In addition to this, CIL is also confident of achieving its target for 2013-14, which is 487 million tonnes.

He said that “With the completion of these three lines in the next two to three years, we would be able to increase our production capacity considerably.”