Railways to procure 2,000 wagons exclusively for Coal India

The Indian Railways on Tuesday signed a memorandum of understanding (MoU) with Coal India Ltd (CIL) for providing goods wagons exclusively for transporting coal. This is part of a joint effort by the ministries of railways and coal to help state-run miner Coal India Ltd to achieve targeted production of one billion tonnes of coal by 2020.

Accordingly, Indian Railways will procure 33 rakes consisting of around 2,000 wagons to facilitate faster evacuation of coal.

This will involve an initial investment of Rs500 crore and an overall anticipated investment of Rs5,000 crore over a period.

This is "a path-breaking agreement which will result into speedy supply of wagons for coal loading in dedicated circuits," railway minister Suresh Prabhakar Prabhu said on the occasion of signing the MoU.

The agreement was signed in the presence of Prabhu, coal and power minister Piyush Goyal and minister of state for railways Manoj Sinha, among others.

Prabhu noted that coal transportation is an important source of revenue for Railways as two-third of its revenue comes from coal. At the same time, experts say, wagon availability will be a key factor for Coal India achieving its production target

Coal minister Goyal said the MoU will help CIL in fulfilling its one billion tonne target, adding that the state-run coal miner has ensured that there is no single power plant in the country today that is critically short of coal.

"This became possible only because of the support of ministry of railways," he said.

"By signing of the MoU today, Railways and Coal India Ltd will be entering into a strategic partnership which would ensure adequate wagon availability for meeting the transportation needs of coal produced by Coal India Ltd. This strategic partnership between Railways and Coal India Ltd would not have been possible but for the motivation and guidance provided by the two ministers," said a senior railway official.

Under the MoU, Railways will procure wagons on behalf of CIL, which will lead to additional loading of 8-10 tonnes per wagon compared to the conventional wagons of Indian Railways.