For the economy to get out of its low-growth rut, the infrastructure components on which it rides have to move forward in harmony with each other. Quick progress planned in one area can be negated if other areas linked to it do not keep pace. To tackle the serious power shortage afflicting the manufacturing sector, which adds to costs and reduces global competitiveness, the government has got the country's principal coal producer, Coal India, to agree to supply 85 per cent of the needs of a massive 78,000 megawatts of new power capacity projected to come up in less than two years. This will raise the installed thermal power capacity in the country by 57 per cent and go a long way in mitigating the current power shortage. That gives rise to stupendous expectations from Coal India, whose output has virtually stagnated over the last few years: the production of an additional 262 million tonnes (up 47 per cent on 2012-13 output) to feed the new capacity. But even if it is assumed that this can be done - since a major bottleneck (delayed environmental clearances) was man-made - it is worth asking if the railways and the ports can conceivably have the additional capacity to carry not just the extra domestic output but also the additional imports envisaged.
Compared to coal output, the railways have not done all that badly. Over the last four years the railways have increased their carriage of what Coal India has produced from 74 to 89 per cent, achieving a compounded annual growth rate of eight per cent. Assuming that the railways will have to carry 90 per cent of the additional 262 million tonnes that - hypothetically - Coal India will make available, they will have to raise their carriage of coal by 53 per cent in two years from the 2012-13 level! Even the availability of rakes for carrying the coal would have to go up by around 18 per cent, which would be a tall task given the railways' track record in the recent past.
This is not all. To feed the new power-generating capacity, coal imports will have to go up by 39 million tonnes - when the major ports currently have a coal-handling capacity of 66 million tonnes. And this additional imported coal will also have to be carried by the railways. Given the fact that the eastern section of the dedicated freight corridor, which will have to bear the brunt of the additional coal traffic (most coal mines are in eastern and central India), is two years behind schedule; and also considering the status of the projects to link ports to main rail routes, the overall picture seems highly daunting. It is difficult to imagine that the railways and the ports will indeed have the capacity to handle the additional coal that will be needed by the new power-generating capacity coming up in two years. This is not to say that it is not a good thing to get Coal India to start running, but an expectation that thermal power generation will go up by over 50 per cent in a mere two years appears unrealistic. Instead of patting its back on clearing fresh fuel supply arrangements for new power projects, the government would do well to undertake concurrent planning to augment capacity of the railways and ports to handle more coal in the next two years.
