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February 13, 2001
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Money > Business Headlines > Report February 13, 2001 |
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Rationalise rail freight on coal: Coal ministryThe ministry of coal has called for a reduction in rail freight on coal, saying that it has been increasing at a faster pace than coal price. Coal ministry's advisor (projects) M K Thapar said that the bulk of Indian coal, which is transported by rail, accounts for 44 per cent of the total rail traffic in the country. Coal freight has increased at an annual rate of around 13 per cent during the last 18 years as against a nine per cent annual increase in basic price of coal during the same period, he added. Between 1981 and 1999, the element of railway freight in power grade 'F' coal has increased from 43 per cent to 54 per cent of the delivered cost at 750 kms, making Indian coal less competitive at several destinations. He said that major power stations in Gujarat and Maharashtra, where Indian coal has to compete with imported coal, the freight element is presently as high as 71 per cent. He pointed out that in view of the adverse economics of the delivered price of indigenous coal prevailing, it would be worthwhile to effect a reduction in freight rates for the slab of 450 kms and above. This will encourage long distance consumers to go for indigenous coal, otherwise they would try and switch over to alternate fuels or import, Thapar said. Listing the issues that needs to be addressed for making the Indian coal competitive, Thapar said majority of it is of high ash content and low calorific value and the problem has further compounded with increasing share of coal from opencast mining. Multiplicity of supply sources also adds to the problem of inconsistency in quality of coal, he added. Notwithstanding the imports of coal, Thapar said, in a long-term perspective it appears that neither the public sector nor the private sector will be able to cope with the demand of the economy by their exclusive operations. The demand will, therefore, require their joint collaborative efforts to produce the total coal requirement of coal for which the government has already taken policy initiatives for encouraging private participation and has allowed foreign direct investment (FDI) in the coal sector, he said. UNI |
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