Financial Daily from THE HINDU group of publications
Saturday, May 14, 2005
Industry & Economy - Coal
Coal shortage hits Rlys' freight movement plans
Kolkata , May 13
SHORTAGE of coal in the country has put the Railways in a fix.
It is now being forced to undertake certain operations which are not to its liking as these are not part of the freight movement plans.
The unplanned movement is creating pressure on the Railway system. For example, coal is being transported from the mines at Ranigunge, Jharia and even as far as IB Valley to meet the requirement of the super thermal power stations located at Farakka (West Bengal) and Kahalgaon (Bihar). This is because the production in the Rajmahal mines to which the power stations are linked has not kept pace with the demand. Which means not enough coal is available for transportation by the dedicated MGR (merry-go-round) system.
As a result, on an average five to six coal rakes are being moved daily from distant places to these super thermal power stations. Undertaking this kind of movement was not envisaged in the Railways' original freight movement plans.
Another problem being faced by the Railways is underutilisation of capacity. For example, the Railways has built up capacity to load about 25-26 rakes a day at Talcher mines of the Mahanadi Coalfields to meet the requirement of various power houses, mostly located in the southern region. The average daily loading has dropped to 16-17 rakes, rendering substantial capacity idle.
The capacity was built at an investment on the basis of certain traffic estimates which have gone haywire.
If the estimated traffic does not materialise, the capacity remains idle not only in the Railways but also at other levels. For example, the massive coal handling plants, installed at Paradip and Ennore ports at huge investments with assistance from the Asian Development Bank to handle as much as 20 million tonnes (mt) annually for coastal shipment to meet the requirement of the Tamil Nadu Electricity Board, now run the risk of operating at much less than their rated capacity.
The coal shortage is also creating a situation where the Railways is being required to undertake unremunerative short lead movement. For example, the captive mines of Kania super thermal power station are unable to meet the requirement of the power station with the result coal is being moved by rail from neighbouring Talcher mines. There is hardly any money in such movement for the Railways.
The transportation of the imported coal too, it is felt, will not bring good revenue to the Railways. Thus, about one mt of power house coal being imported through Visakhapatnam port will be transported by rail to Simadri power station which will be a short lead movement entailing meagre revenue for the Railways. Similarly, one mt to be imported through Paradip for transportation to Talcher too will not have a long lead and therefore not earn any significant revenue for the Railways.
The Railway sources, however, indicate that north Indian power houses have not been hit by the present coal shortage. One reason is that they have built up sufficient stocks over the months. The Railways has been able to evacuate whatever produced by various mines under Central Coalfields Ltd (CCL) and South Eastern Coalfields Ltd (SECL) for these power houses.
In fact, there is an asymmetry between the infrastructure development and coal production. The coalfields where the infrastructure is fairly developed such as Rajmahal mines of Eastern Coalfields Ltd and Talcher mines of Mahanadi Coalfields Ltd (MCL) are not producing enough hitting the average daily loading of wagons in these mines while the mines of IB Valley under MCL and of Karanpura under CCL and Korba under SECL, where infrastructure is not so developed, nothing compared to Rajmahal and Talcher mines, have achieved credit excellent records in wagon loading.
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