Coal India plans capex of Rs 10,000 crore for FY2020-21

• In the first quarter of the current financial year, Coal India has already spent Rs 844 crore of its budgeted capex, surpassing the provisioned target of Rs 720 crore for Q1

• Capex is a key scoring performance parameter in the Memorandum of Understanding that CIL signs every year with its administrative ministry

New Delhi: Coal India Limited has allocated Rs 10,000 crore as capital expenditure (capex) for the FY2020-21, India's largest coal miner said in an official statement on Thursday. "Subsidiary-wise combined capex plan and capital budget of CIL as whole for FY 2020-21 is pegged at Rs 10,000 crore," Coal India said in the statement. While the plant and machinery portion, including procurement of HEMM (heavy earth moving machinery), comprises the major share with over Rs 3,700 crore for the year, the expenditure on land acquisition and rehabilitation and resettlement involves upwards of Rs 1,900 crore, it said.

These two heads make up around 57 percent of the overall capex of 2020-21. The balance 43 percent is made up of the expenditure on transportation of coal evacuation, mine development, wagon procurement and others, including solar initiatives, research and development and exploration, Coal India said.

In Q1FY21, Coal India has spent Rs 844 cr of its capex

In the first quarter of the current financial year, Coal India has already spent Rs 844 crore of its budgeted capex, surpassing the provisioned target of Rs 720 crore for Q1. Even amid coronavirus-induced slowdown, the capex spend in the first quarter of the current financial year was 4.2 percent higher compared to the corresponding quarter last fiscal, said Coal India. CIL spent Rs 810 crore on its capital expenses in the April-June period of the previous financial year.

Of the Rs 844-crore capex, HEMM, other plants and machinery, accounting for Rs 393 crore was the major component. This was followed by spending on coal evacuation transportation infrastructure, like first-mile connectivity, including coal-handling plants, silos, crusher, railway sidings and corridors worth Rs 241 crore. Mine development and exploration and prospecting amounted to Rs 80 crore and Rs 66 crore, respectively. The balance was made up by the other heads, said Coal India.

Capex is a key performance parameter in annual MoUs signed with Ministry

Capex is a key scoring performance parameter in the Memorandum of Understanding that CIL signs every year with its administrative ministry, a senior executive of the company said.

"The capex utilisation of the mining monolith received a boost from three of its subsidiaries South Eastern Coalfields Ltd (SECL), Northern Coalfields Ltd (NCL) and Central Coalfields Ltd (CCL) who between them accounted for 81% of the capital expenditure, ending June, 20 quarter," the statement said.

SECL topped the list with Rs 435 crore actual spend, followed by NCL with Rs 149 crore and CCL at Rs 102 crore.

The MoU that CIL enters into with government is a negotiated agreement and contract between the Centre and the management of the PSU to evaluate the performance of the CPSE at the end of the year.

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