The Indian government will soon set up an inter-ministerial task force to rationalise coal sourcing so as to help key consumers in the power, steel and cement sectors optimise transportation costs.
Coal Minister Sriprakash Jaiswal had recently convened a meeting of top government officials, including Coal Secretary C Balakrishnan and Coal India Chairman Partha S Bhattacharyya, who deliberated on the matter and suggested the formation of an inter-ministerial panel.
"It has been decided to constitute an Inter-Ministerial Task Force with members from ministries like Coal, Power, Steel, Railways, Central Electricity Authority, Coal India Ltd
(CIL) and other state-owned coal firms, NTPC, and the Department of Industrial Policy and Promotion," Jaiswal told PTI.
"The task force would undertake a comprehensive review of existing coal sources and feasibility for rationalisation of these sources with a view to optimise transportation costs,
given the various technical constraints," he added.
The high-profile panel will be asked to submit its report within three months, which will then be taken into consideration by the Coal Ministry for necessary action.
Rationalising coal sources will help end-user companies procure coal from nearby coal-producing firms, rather than entities they have entered into supply agreements with.
Besides transportation costs, consuming firms would also be assured of continual supply if coal sourcing is rationalised, a senior Coal Ministry official said. User companies spend a significant part of their operating expenditure on transportation.
Coal India Ltd, the country's largest coal producer, supplies it across the nation through eight subsidiaries located in different regions.
"For example, if a power unit in Maharashtra was getting coal from Central Coalfields Ltd, which has mines in Jharkhand, under the previous supply regime, with
rationalisation of coal sources it would be able to get coal from the nearby Western Coalfields," the official said.
Long-haul coal transport results in major pilferages and delays in delivery of the stock, among others. Coal source rationalisation would also help user firms hedge against the shortage of railway rakes for movement of coal in the country, the official added.
CIL aims to produce 461.5 million tonnes of coal and import another four million tonnes. However, the domestic supply-demand gap -- currently pegged at around 80 million tonnes -- is fast expanding and is pegged to more than double in the next two years.