Indian Railways earns nearly Rs 1,000 cr more by ferrying imported coal

The Indian Railways has earned close to Rs 1,000 crore more by ferrying imported coal in 6 months to September 2021. According to official data, cumulative freight earnings from imported coal stood at Rs 4,598.88 crore during the period, up from Rs 3,682.32 crore till September 2020. This was during the period when there was a perceived coal shortage in the country and power plants struggled to meet their requirements.

The highest earnings from imported coal during the financial year were reported in April 2021 at Rs 840.28 crore, up from Rs 445.69 crore in April 2020.

Total imported coal loaded during the six-month period stood at 45.87 mt, up from 37.24 mt during the same period of the previous financial year.

This is expected to rise further with the power ministry’s directive to thermal power generators to import coal for at least 10 per cent blending, due to a shortage of domestic coal. This is a sharp reversal of its earlier directive of using domestic coal.

“Thermal power plants based on domestic coal will use imported coal of up to 10 per cent for blending with domestic coal, wherever technically feasible, to meet the increased power demand in the country. Power generation companies shall expedite the process of importing coal for blending to meet the requirement,” stated a notification on Tuesday.

Total coal movement by train also reported an uptick at 257.09 mt during the period under review, up from 197.03 mt in the comparable months of last year. Correspondingly, earnings from domestic coal movement rose over 53 per cent to Rs 25,705.90 crore, up from Rs 16,760.21 crore. This is likely to improve Indian Railways’ operating ratio, a measure of the financial performance.

Thermal power plants are, however, reporting lesser availability despite the higher coal movement.

According to the fuel management division of the Central Electricity Authority, the technical arm of the power ministry, the share of coal-based generation increased to 66 per cent from 62 per cent in 2019 during the August-September period. The coal stock at power plants was also fast depleting and stood at 7.3 mt.

Multiple arms of the government are co-ordinating to address the coal supply issues in the country. The coal ministry was directed to increase coal supply while the railways was told to make more rakes available for coal supply to power plants at this meeting.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor