Coal price pooling would erode railways’ earnings in 2 years: CEA

The government’s proposed pooling of domestic and international coal prices to make costly imports viable would erode Indian Railways’ freight earnings by Rs 2,200 crore over the next two years, the topmost power sector planning body said today.

Pooling will rationalise coal transport, bringing down the freight bill of coal companies, according to the Central Electricity Authority (CEA).

Currently, state-owned Coal India Limited (CIL) supplies coal to power companies across the country, irrespective of their location. Pithead plants account for 28 per cent of installed coal-based capacity, coastal plants account for 16 per cent and non-pithead non-coastal projects account for the 56 per cent capacity. Owing to domestic shortage, individual utilities resort to coal imports.

Once pooling comes into effect, imported coal will have to be supplied by CIL to all the three kinds of stations. Movement of imported coal to new inland plants and movement of domestic coal of CIL to existing coastal plants will lead to criss-cross movement.

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