Exclusive | States stay away from rail-ship-rail route for coal transportation this summer

The government has been asking states to lift coal through the rail-ship-rail route.

No state has assigned the rail-ship-rail (RSR) mode of coal transportation in India to feed their thermal power plants (TPPs) until now, senior officials from the coal and power ministries told Moneycontrol on May 17.

Since imported coal for blending with domestic coal to generate electricity is costly, and the railways has been facing logistical pressure in coal evacuation from the eastern mines, the government on November 30 last year advised the western and northern states (Punjab, Rajasthan, Gujarat and Maharashtra) to transport part of their total domestic coal requirements through the RSR route.

But, five and a half months later, it is only NTPC Ltd which has started transporting coal through the RSR mode for its TPPs at Dadri and Jhajjar. The state-owned Maharatna PSU is lifting coal from the Paradip port in Odisha and bringing it to a western port, from where the coal is further transported through the railways to the TPPs. Despite being more expensive than the All Rail Route (ARR), the RSR mode was pushed by the government because of the extra load on railway lines, almost all of which are congested by now.

“While NTPC has already started coal evacuation through the RSR mode, the four concerned states seem to have kept the option in abeyance as of now because Maharashtra (MAHAGENCO), Gujarat and Rajasthan floated tenders, but none of the states decided on the bids. Punjab opted out beforehand,” Amrit Lal Meena, Secretary, Ministry of Coal, told Moneycontrol.

Also read: MC Interview | Don’t expect shortage of coal, imports will continue to increase: Coal Secretary.

The primary reason is that availability of coal through ARR is reasonably sufficient for the states as of now, he added.

Meena said it is unlikely that states will opt for the RSR route this summer, as time has almost run out. “This is like any other contract. The states need to float a tender, indicating the eligibility based on which bids are received, after which the contract is finalised and kept ready. For any tender to materialise, it takes almost two to three months,” he said. Peak summer usually lasts until July in most parts of the country.

“Therefore, had the states undertaken this exercise and prepared the list of their transporters, then for any eventuality in June or July, it could have been handy for them. But because the cost per tonne in the sea route is higher than that available on railroads, somehow the states are not able to take a favourable decision on the RSR route as of now,” the coal secretary said.

Only two rakes per day via RSR route

A senior power ministry official clarified that contrary to some reports, there has been no increase in power tariffs due to the use of RSR coal.

“It is not going to make an impact on power tariffs because the quantum is very low now, and it is likely to remain the same throughout this summer, as states have not finalised contracts yet,” the power ministry official said requesting anonymity.

Meena said currently the ministry is transporting about 400 rakes of coal every day solely for the country’s power sector, of which only two are through the RSR route.

The cost of coal supplied by rail is about ₹4,700 per tonne, while for RSR it is about ₹7,000. However, RSR coal is cheaper than imported coal which costs ₹10,000-12,000. The government has been pitching the RSR route as a cheaper alternative to imported coal.