The idea of rail-cum-road transfer came about a few years ago, when Coal India Ltd (CIL) was looking at various ways to ensure sustained fuel supplies to power stations.

With railway sidings exhausting their capacity and expansion not being easy, it was a challenge to reach coal to the consumer. The solution came through rail-cum-road transport where coal is taken by road to goods sheds which are located away from the mines, and then for forward journey by rail.

Customers, particularly the private power producers (IPPs), were happy with this arrangement. Latest data show that they prefer this costlier mode over direct transfer of fuel from railway sidings at the mine-end.

Between 2017-18 and 2018-19, CIL increased supplies by 28 mt but transfers through railway sidings dropped from 298.8 million tonne (mt) to 294.5 mt. The share of railway sidings in total transfer dropped from 51.5 per cent to 48.4 per cent. This contradicts the wagon loading data released by the Railways. A detailed scrutiny suggests that at least 62 per cent of fuel produced by CIL was transferred by rail for longer part of the journey.

There are several reasons for the decline in loading from railway sidings.

First, there is an increase in private investments in coal beneficiation plants in coalfield areas. A section of consumers, mostly from sectors other than power and located far from the pithead, prefer to take fuel by road to the washery and transfer beneficiated coal to save on railway freight.

Better savings

Considering Indian coal has 30-45 per cent ash content, the savings can be substantial for long distance travel. According to one estimate, the landed cost of raw fuel to the customer is nearly three times the ex-mine price. According to a CIL source, the biggest push reportedly came from the IPPs. They preferred to pay a little extra cost for comfort on quality and supply chain management.

To take delivery through the railway sidings, the consumer had to be at the mercy of both the coal company and the railways. This is apart from the regular calls for strikes, especially in Talcher coalfields in Odisha, at sidings.

Once he places the indent, the consumer has less scope to interfere in the process. He has no control over the loading schedule. Also, his coal qualities may suffer.

Road delivery from the mine offers him better control over the system. He is now directly responsible for movement of fuel and can decide from which goods shed the movement will be faster and transfer accordingly. “We opened goods sheds for fuel transfer out of desperation to beat the clogged system and push up supplies to power plants. Some power plants seems to have liked the flexibility,” said the CIL official.

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