State owned Coal India limited (CIL), the world's single largest coal producer, may be scaling up its coal output every year but the coal major continues to grapple with the problem of coal offtake, thanks to the inadequate availability of rakes from the Indian Railways.
With the despatch of the dry fuel failing to keep pace with CIL's rising production, the coal stock at the pitheads of all its subsidiaries has now gone up to around 50 million tonnes (mt). The navratna coal firm is likely to end the current financial year with a coal inventory of 58 mt.
“As against our requirement of nearly 200 rakes, we are getting only 165 rakes per day from the Railways. We regularly take up the issue of higher allotment of rakes with the Indian Railways but the latter is not in a position to provide additional rakes”, a highly placed CIL official told Business Standard.
CIL’s coal production which is hit during the monsoon season picks up in the second half of any fiscal and reaches its peak during the last quarter (January-March). On an average, CIL’s coal production during January-March stands at around 1.6 million tonnes per day.
He pointed out that while CIL's coal production was going up at the rate of around seven per cent per annum, Indian Railways was raising its wagon manufacturing capacity by only three per cent every year, thereby leading to the shortfall of rakes.
Asked if CIL planned to foray into wagon manufacturing, the official stated, “Manufacturing of wagons is not our area of core competence. It is the Railways which needs to ensure the availability of more wagons and strengthen its network.”
Though the problem of coal stock piling up was more pronounced in Mahanadi Coalfields Limited (MCL), Eastern Coalfields Limited (ECL) and Bharat Coking Coal Limited (BCCL), other subsidiaries also encountered the problem of coal despatch, he added.
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As CIL was scaling up its coal output target every fiscal, it needed more rakes to ensure that the coal offtake kept pace with its rising production. The coal PSU which produced 405 mt of coal by the end of 2008-09 aimed to produce 435 mt by the end of this fiscal and its production was projected at about 520 million tonnes by the end of 2011-12.
It may be noted that of late, CIL has roped in global consultancy firm KPMG to prepare its Corporate Plan-2020 which would spell out the future plans for the company. Among other things, KPMG is expected to evolve a workable solution to the problem of coal offtake which if not tackled effectively can have a long-term impact on the end users of the raw material.