Coal India Ltd. subsidiary Mahanadi Coalfields Ltd. (MCL), on Saturday, reached agreements to form two Special Purpose Vehicles (SPVs) for evacuation of coal from two of its biggest coalfields in Odisha.
The agreement was reached following a meeting between Odisha Chief Secretary and the Union Coal Secretary. The SPVs, one each for Talcher and Ib valley, would be formed between Mahanadi Coalfields, the public sector units under Indian Railways and the State government for construction of railway infrastructure to ease coal movement. The move gains significance in view of the fact that coal evacuation is now emerging as the single largest bottleneck in increasing availability of the fossil fuel to the power plants and other user-sectors.
Production is increasing at a faster clip than coal evacuation and may become the single largest bottleneck in the government’s plan to take coal production to one billion tonnes by 2020 from its sub-500 million tonnes level now. This apprehension has been expressed as much by the CIL leadership as the Coal Ministry.
During a meeting here in mid-January, Union Coal Secretary Anil Swarup had said that the issue had been taken up with the Railway Board. The Coal Ministry had identified 50 rail projects to ensure evacuation of coal from the mines.
Sources told The Hindu that additional railway lines would help improve the turnaround time for wagons. “Under these SPVs, the Railways will acquire the land needed for laying the tracks, while MCL will provide the funds (it has a 64 per cent stake in the SPV).
It may be mentioned here that as far as September, 2012 the need to have these infrastructure was highlighted. MCL is gradually emerging as one of CIL’s largest producers. Its production is targeted to increase to 127 MT in 2014-15 from 111 MT .
