RITES, Power Finance Corporation in coal import pact

27 March 2008

Formerly Rail India Techno Economic Services, RITES Ltd, a multi-disciplinary public sector enterprise and Power Finance Corporation joined hands to import feedstock fuel in the country.

The agreement covers coal imports from Africa and other countries to fill the demand - supply gap for coal required by thermal power plants in India during the eleventh 5-year Plan.

Coal is expected to be the main fuel for power generation in view of the uncertainty of the availability and cost of gas . Coal- and lignite-based thermal projects have been identified for capacity addition in 11th and 12th plan 5-year Plans. In view of the expected shortfall in the availability of domestic coal, India will have to resort to imports to meet the demand for the fuel.

Power Finance corporation has  identified funding  coal-based thermal power projects as the mainstay for a long-term sustainable growth of the power sector to support the over 8 per cent GDP growth. It has suggesting supplementing domestic coal supplies with imported coal on a long-term basis at competitive prices.

Since coal is a low-value bulk commodity, it is transported by rail in India and forms the single-largest commodity transported by Indian Railways.

RITES being a technical arm of Indian Railways will liaison with railway for sectoral studies, development of suitable plans and ensure adequate rail network for coal movement and, where required, development of new rail links with port connectivity.