Coal India Ltd (CIL) registered 33 per cent jump in capex at ₹7,027 crore during the first half of the current financial year compared to ₹5,300 crore in the same period last year on the back of growth in expenditure on expansion of coal evacuation infrastructure.

The two coal evacuation infrastructure heads, which include setting up of coal handling plants (CHP)/silos and railways lines, together accounted for 36 per cent or ₹2,547 crore of CIL’s total capex during the said period.

“Capex push is essential for long-term growth prospects. To align the increasing production with robust transportation logistics CIL is fast tracking the development of its coal evacuation system. This would help in handling the seamless movement of coal in future,” a senior executive of CIL said in a press statement.

Land acquisition

During the referred period, capital expenditure on coal evacuation projects pipped the heads of land acquisition and procurement of heavy earth moving machinery (HEMM) which conventionally comprises the bulk of the capex.  

Construction of CHPs/silos under first mile connectivity was the major capex head at ₹1,489 crore in H1 FY23 with an increase of 2.4 times compared to ₹614 crore during corresponding period last year. Most of the expenditure was incurred by CIL’s three subsidiaries MCL, NCL and SECL.

Laying rails corridors and rail sidings was the next major head where the capital expenditure has risen to ₹1,058 crore with an upsurge of 33 per cent.

CIL is likely to close FY23 with a capital expenditure of close to ₹16,500 crore which would represent a 2.6 x jump in a span of three years, it said. Expenditure on land and HEMM followed with ₹1,056 crore and ₹618 crore respectively.

“It is essential that concurrent with production capex is also hiked up to sustain the growth momentum. We have increased our capex on introduction of modernised fleet and laying new rail lines which are catalysts for output and off-take growth,” the executive said.

Related Topics
comment COMMENT NOW