Construction of three railway lines for coal evacuation in Chhattisgarh, Jharkhand and Orissa will be a top priority for Coal India Ltd, CIL CMD-designate Mr S Narsing Rao has said.

The comments come amid the world’s largest coal miner preparing to enter into Fuel Supply Agreement with power producers following a Presidential directive. FSA mandates assuring 80 per cent of the committed coal delivery to power projects, coming up mainly during the 12th Five Year (2012-2017) Plan.

According to a statement recently issued by the Prime Minister’s office, CIL is expected to enter into FSAs for a total capacity of 50,000 MW.

Mr Rao said in an interview to PTI that these railway lines are essential to meet 12th Plan power capacity addition which is likely to be fixed at 1,00,000 mw. Thermal power is expected to contribute 60 per cent of the total target.

It requires nearly 240 million tonnes of thermal coal to produce 60,000 mw power and if the three railway lines are created in two years, the target can be met, Mr Rao said.

“There are three critical missing railway links in the country each about 100 km long - One in Jharkhand, one in Chhattisgarh and the third one is in Orissa.

“If we are able to construct railway line in the next two years we can produce 240 million tonnes of coal and achieving 60,000 mw power capacity addition is not a problem,” he said.

The proposed railway lines are Tori-Shivapur-Hazaribagh line in Jharkhand which is about 100 km, Mand-Raigad which is in the Bilaspur region in Chhattisgarh and another 100-120 km railway line between Bhupdevapur and Manoharpur in Orissa.

Mr Rao, however, indicated that environmental issues such as forest clearances, which are pending for the past several years, may push the project behind.

He said it will benefit all stakeholders - Railways, Coal India and three state Governments if the issues are resolved quickly.

“Coal India will get huge revenue. Country will get coal. Railways will get huge freight cost. States will get royalty and VAT. Each state will get Rs 1,500 to Rs 2,000 crore revenues per annum extra,” he said.

Mr Rao said the 12th Plan target for coal production is at the discussion stage and is likely to be fixed at 800 million tonne. The target for the 11th Plan was 680 million tonne and the country ended up with 554 million tonne production.

“The 12th plan target will be fixed in another three months time,” he said.

According to Mr Rao, the new Land Acquisition Bill which is yet to be presented to Parliament is posing some problems for land acquisition.

“Farmers are now saying you pay us four times more (for the land) or you wait for the bill to be passed. You come after that. We have reached a dead-end now,” he said.

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