When the Union Government announced in May an investment of Rs 50,000 crore to upgrade the country’s coal evacuation infrastructure, it recognized that India’s anomaly met one-fourth of its consumption needs through imports despite having the world’s fourth largest coal reserves. As Prime Minister Narendra Modi discovered during last month’s review meeting for the sector, as much as 290 MT of coal could not be produced due to a lack of evacuation infrastructure in the country – coal imports were 243 MT in the last fiscal year.
The move to create better evacuation infrastructure is part of the government’s goal of producing 1 billion tons of coal by 2025–26 – 729 MT in the FY20. In fact, the 1-billion-tn target was to be reached by 2020 and was pushed back only because of a lack of infrastructure to evacuate such a quantity of mineral. As is known, because of the fire hazard, coal can not be stored in large quantities at pitheads.
While the total expenditure of Rs 50,000 crore would be spent on developing coal handling plants, ports and strengthening the transport chain, the construction of conveyor belts and merry-go-round facilities that transport at least 21 per cent of the coal mined directly from pitheads to power plants is a vital component of the agenda. The construction of rapid loading systems, the development of siding connectivity, the linking of silos to railheads and the creation of rail links for coastal shipping are further investment objectives. “The proposed investments will include Rs 18,000 crore worth of investments in mechanised transfer of coal (conveyor belts) from mines to railway sidings,” Finance Minister Nirmala Sitharaman announced last month.
Seeking to reduce the share of roads in coal transport to 18 per cent, given costs and environmental concerns, as much as 60 percent of coal is proposed by the coal ministry, would be transported through rail infrastructure. The recent operation of the 44-km rail link Kharsia-Korichapar in Chhattisgarh is an important development in this regard. Part of the proposed 136-km-long East Rail Corridor – Kharsia-Korichapar-Dharamjaygarh-Korba – the new link allowed the evacuation of coal from the Mand-Raigarh and Korba fields of South Eastern Coalfields Ltd (SECL), the largest coal-producing subsidiary of Coal India Ltd (CIL). SECL is expected to contribute 262 MT (26%) of its target annual production of 1 billion tons by 2025-26, with commercial mining, which has been authorized by the government, accounting for another 250 MT.
Chhattisgarh East Railway Ltd (CERL), a special purpose vehicle established by the SECL, the Chhattisgarh Government and IRCON International Ltd, is developing the East Rail Corridor at an estimated cost of Rs 3,055 crore. While SECL holds a 64 per cent stake in this tri-party SPV, the government of Chhattisgarh and IRCON have a 10 per cent and a 26 per cent stake. The synergy between the SPV players allowed the Kharsia-Korichapar line to become operational in record time. The next leg of the corridor, 30 kilometers between Korichapar and Dharamjaygarh, is likely to be ready by the end of this year. The corridor would be completed once the final stretch connecting Dharamjaygarh to Korba, a distance of 62 km, becomes operational.
With the Kharsia-Korichapar link, which will boost supplies to the Maharashtra and Gujarat power stations, all three major rail links for which the CIL has been pushing – Jharsuguda-Sardegna under Mahanadi Coalfields Ltd in Odisha and Tori-Shivpur under Central Coalfields Ltd in Jharkhand being the other two – have materialized. These would make it possible to evacuate coal from large reserves, playing an important role in CIL increasing its output in the future.
