Private rail corridors likely to connect coal mines with industry

The government is likely to allow private firms to build and operate railway lines connecting the mines of state-run Coal India Ltd (CIL) to power, steel and cement projects, according to a report.

The proposal, approved 'in principle' by the railways and coal ministries, will allow private companies to charge a fee from the users of the rail links, similar to the toll charged by highway developers, according to an Economic Times report citing unnamed officials.

"The proposal will help easy and early completion of these railway lines that are critical to raising Coal India's production to the targeted 1 billion tonne by 2020. We will identify profitable lines, which can attract private firms. This is just one option we are exploring to set up the lines expeditiously," the report cited an official as saying.

The coal ministry has identified 51 new railway lines to connect blocks of various CIL subsidiaries. A secretary-level meeting is expected soon to finalise arrangement for funding and execution of the new projects.

Senior officials of the coal ministry and Railway Board are expected to meet on Thursday to discuss the progress of about 26 ongoing rail projects connected to the mines of CIL's several subsidiaries.

The official said the coal ministry is looking at a 'bottoms-up approach' for increasing production and aspects like increasing number of mines, enhancing production from existing mines, and improving technology and evacuation facilities.

There is scope for increasing output from primary subsidiaries of Coal India like Mahanadi Coalfields and South Eastern Coalfields. The coal ministry is identifying ways to raise production in each mine and the set of actions to be taken. But improving evacuation is equally important.

''Three critical railways lines in Chhattisgarh, Odisha and Jharkhand will increase coal evacuation by 200 million tonne over the next several years. We are looking at more rail links as well as enhancing availability of rakes to 450 in the next 2-3 years from 200 now," the official said.

The coal ministry has set up a coal project-monitoring portal on the lines of the project monitoring group (PMG) portal in the cabinet secretariat, where the status of each coal mining project will be monitored on a regular basis. Coal India is targeting production of 507 million tonne in the year to 31 March 2015.


The ministry expects an additional 100 million tonne of coal production in the next financial year from coal blocks to be awarded through auction and the government dispensation route. The blocks are expected to generate about 380 million tonne of coal over the next 2-3 years.

The coal ministry has received over Rs6,000 crore from previous coal mine developers, including Jindal Steel & Power, CESC and JSW Energy, on account of the Rs295 per tonne retrospective levy imposed by the Supreme Court in its 24 September order.