Coal India Limited (CIL) more than doubled its capital expenditure to an unprecedented high of Rs.13,115 Crores in FY’21 compared its previous year. Against the capex of Rs.6,270 Crores in FY’20 the company clocked 109% growth amid the Covid slump. Never before was such capex growth registered by CIL. This comes at a time when the Centre had advised CPSEs of the country to scale up their expenditure to boost the economy.
This also marks the state owned Maharatna coal miner’s all-time high capital expenditure, breaching the ramped up capex target of Rs.13,000 Crores, achieving 101% of the revised target.
CIL’s original sanctioned capex budget was Rs.10,000 Crores for FY’21. However, the government assigned CIL a challenging 130% achievement of the budgeted target the company to be evaluated as ‘Excellent’ under this specific parameter in MoU rating. This prompted CIL, for the first ever time, to tweak up its capex budget by 30% and revise it to Rs. 13,000 Crores.
“The entire capital expenditure was funded through internal resources. Capex growth during all the four quarters of FY’21 was significantly higher compared to previous year. Progressive upto December’20 also our capex utilization was more than what was mandated by Ministry of Coal” said a senior official of the company.
Procurement of heavy earth moving machinery at Rs. 3,453 Crores topped the list of capex heads for FY’21, followed by land at Rs.2,470 Crores, yet another important capital of CIL.
Capex in joint ventures, in proportion to CIL’s shareholding, like Talcher Fertilizers Limited and Hindustan Urvarak & Rasayan Limited accounted for Rs. 2,194 Crores. CIL’s coal evacuation initiatives which include setting up coal
handling plants, silos and constructing sidings accounted for Rs.1,398 Crores. Construction of rail corridors and railway lines summed up Rs. 1,166 Crores, while the rest was made up by different other heads.
CIL and five of its subsidiaries CCL, NCL, WCL, MCL and CMPDIL coasted through their respective revised capex targets for 2020-21. SECL, though did not surpass its revised budgeted target, was the highest capex spender among all CIL’s subsidiaries at Rs. 3,260 Crores creating a record for itself. “The high capex will yield positive results to the company in ensuing years in terms of production and coal transportation” said the referred executive.