Kolkata | Feb 02, 2015: Coal India Ltd (CIL) is looking at a comprehensive revenue-based partnership with the Railways in a bid to create the mega infrastructure consisting of about 50 rail projects to move coal across the country. Using the experience of Krishnapatnam Rail Co, in whose board CIL's newly appointed chairman Sutirtha Bhattacharya was earlier present, the monopoly miner is currently working on the probable models that can be formed to execute the projects.
Krishnapatnam Rail Co is a SPV comprising the government of Andhra Pradesh, Krishnapatnam Port Co Ltd and Rail Vikas Nigam, formed to provide rail connectivity to the port.
"CIL has to find an economic association with Railways. We are having a close look at railway logistics," CIL chairman Suthirtha Bhattacharya said.
Funding Railways's projects of linking mines to users of coal or creating a special purpose vehicle like Krishnapatnam are some of the business models that CIL is currently exploring with the Railways.
"We are looking at various models. One way to look at it is to give the responsibility of building the infrastructure to the Railways and, in return, we get freight discounts. The second model is that we form an SPV which can collect freight from all the users. In these SPVs we can involve the governments of coal-bearing states. We have to see what are allowed under the Indian Railways Act," he said.
To explore the feasibility of the projects of these two PSU behemoths, CIL has recently roped in as advisor A K Maitra, additional member (traffic) of Railway board. The 50 projects are part of the initiative to double CIL's current production level by 2020, Anil Swarup, coal secretary, had recently disclosed. Among other plans to reach the 1 billion-tonne goal, dispatches need to keep pace with production.
Evacuation is growing at 3.2% while production is growing at more than 6% till date this year. Subsidiaries like Mahanadi and Central Coalfields have high pithead stocks where productions are more than evacuations.
Cutting redundancies which lead to seasonal spiking in demand for rakes leading to its shortages are some of the issues that are being looked into.
(Source: http://www.dnaindia.com/)