Coal India sales snagged in red tape

A drop in demand from key consumers and bureaucratic red tape in despatching excess coal to other consumers will impact Coal India Ltd’s (CIL) sales growth in the first quarter, according to a company official.

As against a projected six per cent growth during April-June 2013, volume sales have so far grown just two per cent.

At a time when India is resorting to costly imports to mitigate the short supply of domestic thermal coal, CIL’s opencast mines in Chhattisgarh are flush with the resource, as Government-run generation utilities in Rajasthan and Gujarat have cut intake by over 80 per cent.

According to the sources, as against an average daily requirement of approximately 80,000 tonnes of coal, the two consumers together have been lifting 12,000-15,000 tonnes a day since May.

Washery route

To make the proposition even more difficult for CIL, both the consumers lift coal through the washery route, that is, they have assigned washeries in the neighbourhood to lift raw coal by road, remove dirt and despatch it by rail to the consuming centres in Gujarat and Rajasthan.

For CIL, it means coal is stockpiled at the road-head, a couple of kilometres away from the railway siding.

The procedures set by the country for ensuring transparency require the company to invite fresh tenders — which takes months or years to complete — to appoint truckers to shift this stockpile to suitable locations, to feed consumers in need of coal.

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