Indian Railways has rejected a Coal India Limited (CIL) proposal to finance purchase of rakes by the national transporter. This will increase the uncertainty over supply of enough rakes to carry coal to the end users, including power companies, which are facing a shortage of the fuel to generate electricity.
The railways rejected the proposal citing absence of enabling provisions in the existing norms to earmark rakes for transporting coal. CIL had proposed financing 20-25 rakes only if they were earmarked for CIL use.
?Anyone who is willing to give us rakes for free is welcome, but how can we set aside rakes for a particular purpose? There is no enabling provision at present. Rakes are allocated based on orders,? a senior official in the railway ministry told FE. The issue was discussed at a meeting between senior executives of Indian Railways and CIL on May 30.
During the meeting, the ministry told CIL there was no shortage of rakes and asked it to arrange for transporting the coal lying at pitheads to railheads for its onward movement. It also asked the public sector company to ensure efficient use of rakes by cutting the time taken to load coal to three hours per rake.
CIL?s chief general manager (sales & marketing) H K Vaidya said, ?We have to go by what railways say. We cannot do anything if they do not supply the required number of rakes.?
CIL has reduced the production target for the current financial year to 447 million tonnes from 461.5 million tonnes in 2010-11. The coal offtake target has also been cut to 452 million tonnes. The company blames lack of rakes for the lower offtake.
However, the railway ministry says it is providing 300 rakes daily for transport of coal. According to CIL, it has 64 million tonnes of coal lying at pitheads due to shortage of rakes. The Maharatna firm wants a daily supply of 194 rakes in 2011-12 against 161.9 it got in 2010-11.
The rejection of CIL?s proposal is likely to create problems in supply of coal to power plants, which are critical to reduce power outages. The power ministry estimates that around 22,500 Mw capacity may lie dormant this year for want of coal. Of this, close to 12,500 Mw is existing capacity and 10,000 Mw is to be ready in 2011-12.