Railways signs Rs 500-cr pact with CIL for supply of wagons

The railway ministry on Wednesday signed an agreement with state-owned miner Coal India Ltd (CIL) for procurement and supply of 2,000 high capacity wagons. The move is aimed at ramping up coal loading for Indian Railways amid a shortfall in freight traffic and helping CIL meet production targets.

“This agreement will result into speedy supply of wagons for coal loading in dedicated circuits. The initial investment of Rs 500 crore will lead to an anticipated investment of Rs 5,000 crore (over years),” said railway minister Suresh Prabhakar Prabhu.

Power, coal and renewable energy minister Piyush Goyal, who was also present, said the initial agreement will help CIL meet its target of producing one billion tonnes of coal annually over the next five years. “There is not a single power plant today that falls in the critical (coal shortage) category. This became possible only because of the support of the rail ministry,” he said.

The memorandum of understanding was signed by U C Joshi, Railway Board’s executive director of freight marketing division, and T K Sinha, general manager at CIL’s project monitoring division. Under the agreement, Indian Railways will procure 2,000 wagons (33 rakes) on behalf of CIL.

The agreement will lead to additional loading of up to 10 tonnes per wagon by the railways, as against the loading capacity of conventional wagons, at a time the rail ministry is struggling to meet the current financial year's freight loading target of 1,185 million tonnes.

The rakes would ramp up coal loading from the Talcher and IB Valley coalfields of CIL subsidiaries Mahanadi Coalfields Ltd (MCL) and South Eastern Coalfields Ltd (SECL) to Paradip and Dhamra ports and the power plants located in the Nagpur and Raipur regions. The high capacity wagons will be maintained by the railways at its own cost.