With the Government having charted out an ambitious plan where Coal India ltd (CIl) has been mandated with achieving 1 billion tonnes of dry fuel production by 2019, the Coal Ministry as well as the Railway Ministry are planning to form a special purpose vehicle (SPV). This venture will take care of all the modalities like acquisition of rakes by the Maharatna company and expediting construction of rail lines linking coal reserves with power plants, which will help CIl achieve the target and initiate reforms in the sector.
Once the SPV is formed, all the aforementioned activities will come under its aegis and this will help in their smooth implementation as there will be a separate fund for the purpose.Sources aware of the development told The Pioneer that top officials of both the ministries are scheduled to meet on January 28 to discuss the modalities of the proposed SPV. They added that the nature of the venture is also likely to be decided during the meeting.
In all likelihood, they added that the SPV could be a 50:50 venture between the two ministries. The formation of the SPV will help in smooth implementation of the various activities which the Coal Ministry wants to undertake in association with the Railway Ministry for improving supply of coal to power plants as well as increasing CIl's output in the next four years.
The Coal Ministry has been bullish about expediting the construction of three critical railway links which are situated in Chhattisgarh, Jharkhand and Odisha. These lines are Tori-Shivpuri-Kathotia in North Karanpura, Jharkhand; Bhupdeopur-Korichhaapar to Mand Raigadh mines in Chhattisgarh; and Barpali-Jharsuguda in IB Valley, Odisha.
These are considered as crucial coal corridors as a major portion of dry fuel is to be carried through these lines once they are constructed. The Government feels that once these lines come up, CIl's output could go up by around 300 million tonnes. According to estimates, the construction of these lines could incur an expenditure of Rs7,500 crore. Currently these lines are at various stages of construction.
As of now CIl's output target for the current fiscal is 507 million tonnes and the Government is hoping that by initiating the aforementioned measures, including speeding up environmental clearances for the company's various projects, the 1 billion tonnes target by 2019 could be achieved.
Also in order to fast track carriage of coal to thermal power plants, the Coal Ministry is also keen to acquire around 250 more rakes (in addition to 200 rakes which are currently at CIl's disposal) within the next couple of years. Acquiring the rakes is likely to be done at a cost of around Rs5,000 crore, sources added.
Sources pointed out that the formation of the SPV will help in implementing these operations in an independent manner on the lines of Delhi Metro Rail Corporation (DMRC), which is also a 50:50 SPV between Delhi Government and Union Urban Development Ministry.