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.

“It’s a hopeless situation. We have lost anything between 1.2 and 1.5 million tonnes of sales simply due to an inability to move the coal to rail-head,” the official said.

Even offering the excess coal to the e-auction platform, fetching a higher profit margin, is not considered.

E-auction platform

As per policy, CIL is restricted to offer up to a 10 per cent of production to e-auction. Also, it may be accused of channelling more coal to e-auction for better returns.

“The world may sneer at us. But, that’s the way we do business,” the official said.

As if this was not enough, the company’s despatches from Ib-Valley coalfields in Odisha have been affected over the past week, after police opened fire on agitating employees of one of CIL’s transporters and imposed section 144 on June 8.

The agency was transporting coal from one of the mines in the region to the loading points. This brought coal movement to a standstill as most employees of the transport agency fled, fearing police action.

“We have already lost 0.5 million tonnes of sales in over the last one week and have no option but keep waiting till the situation turns normal,” the official added.

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