Railway Equipment

Captive power projects lose Railway linkages

Indian Railways told the Indian coal company that it did not have enough freight vehicles to supply coal for self-contained power producers, which would hit most of the country's self-contained power projects.

Lack of rakes will adversely affect over 70% of the about 50,000 mw of captive power production capacity installed by industrial houses, according to the Indian Captive Power Producers Association (ICPPA).

Last week, divisions of the Indian Railways wrote to Coal India subsidiaries Central Coalfields, Mahanadi Coalfields and South Eastern Coalfields that they are changing rake allotment system from April 1 due to various reasons. Companies such as Hindalco Industries, Jubilant Life Sciences, Balco, DCM, Ultratech, SRF, Aditya Birla Chemicals, India Glycols, Century Paper & Pulp, ACC Ltd and Adhunik Alloys & Power will now have to shell out extra for transport or will be compelled to procure expensive coal from open market.

“Captive power producers will have to move 4,000 tonne of coal by road to as far as 1,000 km due to cancellation of each rake by Indian Railways,” Rajiv Agrawal, secretary at ICPPA, said. “It is not viable and easy for companies to undertake such a massive exercise due to costs and uncertainties involved in road transport. Captive power producers have to shell out Rs 50-100 lakh more due to cancellation of each rake,” he said. ICPPA members now plan to make a representation before the Indian Railways to seek withdrawal of its circulars to Coal India subsidiaries.

Agrawal said the railways is favouring government run power generation companies and independent power producers at the cost of industries banking on captive power projects. “It has been observed that Indian Railways prefer to cater power projects located closer to coalfields to achieve its coal handling targets easily,” he said.

After receiving the railways’ letter, Central Coalfields had issued a notice, telling its customers to arrange for road transport. “It is likely that consumers would not be granted allotment against offers by Central Coal fields for the respective consumers as railways have issued an embargo that sidings would only have arrears eight times of the average loading rakes of the preceding month.

Requires all self-owned electricity projects. Consumers who are mining through railroads can book their assigned monthly numbers through road mode because they are unsure whether the coal can be provided by rail. "Please read the notice issued on Friday.

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