Rake availability not an issue currently: Coal India

NC Jha, Chairman, Coal India in an interview with CNBC-TV18 said that the company is planning to ramp up the coal production to 9% from the current 6% soon. (Click here to read more)

Talking about the availability of rakes for transportation of coal he said, "The Indian Railways have added more rakes in their fleet. They have promised us to make more rakes available. Rake availability is not an issue currently." The company is expecting to get 190 rakes per day by June. Below is the verbatim transcript of his interview with Mitali Mukherjee and Udayan Mukherjee of CNBC-TV18. Also watch the accompanying video. Q: Last we spoke, you put out a guidance of 477 million tones in terms of volume off take in 2012. But when we spoke with the coal minister, he indicated that may be nearly 15-20% shortage this year. Would you like to relook your guidance, or can you do what you indicated in your volume growth? A: I would plan first to liquidate our stocks to maximum extent, even though our MOU target for off take is 454 million tones. We have made our internal plans through interaction with the Indian railways to dispatch around further 27 million tones. This will be around 25 million tones more than our production plan. So, that would require a growth of something like 9.5%. We are currently doing at around 6%. The gap between demand and availability projected for the year is quite large. The domestic availability was seen to be less, because of the logistic constraints. Now since the Indian Railways have added more rakes in their fleet and they have promised us to make available more rakes. We are hopeful that large part of this cap will be mixed from our stocks. Q: How much is the availability of rakes gone up from the railways in these last few weeks? Given that extra availability how much of the stock which is lying with you, you think can be cleared up this year? A: The availability of rakes in March was something like 182 rakes a day. In April it became 178 rakes a day which compared to the same period previous year was 158 rakes a day. So, there was a net addition of 20 rakes per day during this fiscal in April. There had been some shortfall in May, not because rakes were not available, but because of certain law and order problem in two states. So, the rakes could not reach or transportation could not take place. Rake availability currently is not an issue. Whatever rake is required, is available and is getting loaded. We have discussed with the Indian Railways only two days ago and they have promised to provide us 190 rakes per day in the month of June. Q: When we spoke with Mr Jaiswal last week, he came out in stern support of Coal India and the e-auction process and the fact that cap as well should not be relooked at, has the final resolution been reached on this e-auction issue? A: No proposal for e-auction has come to Coal India as such or I understand even to the ministry of coal. But, there has been some proposal by our ministry is they might have saying to planning commission. But the issue is that e-auction was initiated and is being held for those sectors of consumers who do not have access to coal. That means they do not have linkages and those who have linkages do not get coal sufficiently. For sector other than power we have signed FSA for only 70% requirement. The annual contracted quantity for all sectors other than power, is only for 70% of their requirement. The balance 30% they must source from somewhere. E-auction is the only source which has been made available to them and also to those consumers who do not get linkages. This is because non-core sector consumer other than power, cement, other than steel are not getting any fresh linkages for the last 10 years. So, this was the route or mode through which the coal is made available. Now, if that e-auction is stopped hypothetically, then from where will this sector get coal also 80% of this e-auction coal goes by road to the nearby by consumers and only 20% goes by rail. So, at the moment, that rail mode e-acution coal can move by rail, if more rakes are available. But, road mode will completely stop, because that doesn