Inter-Ministerial Committee Reviews Coal Transport Fares to Enhance Coal Evacuation via Coastal Routes

An inter-ministerial committee is currently reassessing the approach to optimizing transport fares for coal via the rail-sea-rail (coastal shipping) route. The goal is to set fares at a feasible level to promote this as an alternative evacuation mode, thereby reducing carbon emissions and facilitating port infrastructure development that could later support exports.

The committee comprises representatives from the Coal Ministry, Railways, Ports, Shipping, and Waterways Ministry, and Power Ministry.

“Discussions are on at an inter-ministerial level. There have been some issues that the railways have been asked to look into, which include working on rake rates and so on. The Shipping Ministry is working on the possibility of bringing down some charges like handling costs, berthing costs, and so on,” an official aware of the matter told BusinessLine.

Review Meeting

The railways have already responded to several inquiries from the Ministry of Coal ahead of an upcoming review meeting. They have been collaborating with other concerned ministries on this matter for over a year.

“Responses to queries raised by the Ministry of Coal have been sent. And some recommendations on the mechanism for determining prices under coastal shipping are being worked out,” said another official.

Currently, railways account for about 55% of coal evacuation in the country, and the target is to increase this share to 75% by FY30.

“Coal evacuation through alternative routes is to be explored, with the target being 112 MT (of coal evacuation) by 2030,” an official said.

Currently, coal evacuation through the rail-sea-Rail route stands at approximately 40 MT.

The railways are already strengthening the evacuation capacity between Talcher coalfield and Paradip port by tripling and quadrupling the railway network along with auto-signaling works.

Presently, for the supply of coal from MCL (Paradip) to West Indian or north Indian thermal power plants, the total cost increases by around ₹2500 per tonne over the entire rail route.

Rail-Sea-Rail

The rail-sea-rail route integrates rail and sea transport for seamless coal movement from mines to ports and eventually to end-users.

The Union Coal Ministry introduced this route in August last year.

Opting for the rail-sea-Rail mode could potentially save end-users in southern India around ₹760–1300 per tonne in logistics costs, as per a previous study.

The feasibility of using conveyors to transport coal from mines to the coast is also under consideration.

Leave a Reply

Your email address will not be published. Required fields are marked *

LATEST NEWS