Friday, September 30, 2022

Coal India surpasses its capex target for H1 FY21 at Rs 5,023 cr

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  • The target for H1 of FY2020-21 was Rs 4,247 crore

  • CIL’s capex spend during the first half of the ongoing fiscal was a little over half of the planned expenditure of Rs 10,000 crore for the full fiscal

New Delhi: In the first half (H1) of financial year (FY) 2020-21, state-run Coal India Ltd (CIL) has surpassed its capital expenditure (capex) target and has already spent Rs 5,023 crore, the company said in an official statement. The target for H1 of FY2020-21 was Rs 4,247 crore. “Coal India's (CIL) capital expenditure at Rs 5,023 crore ending first half of the ongoing fiscal capped an all-time high of 118 per cent utilisation against the provisioned target of Rs 4,247 crore,” said Coal India. 

“This is a historic high in capex utilisation as CIL has not exceeded 30 percent target utilisation in the first half of a fiscal so far. The previous three year average of H1 capex utilisation has been around 20 percent,” a senior official of the company said.

CIL clocked a robust capex growth of 242% in H1 of FY21

During April-September, CIL clocked a robust capex growth of 242 percent compared to Rs 1,467 crore in April-September period of the previous fiscal. “Actual capex ending Q2 of the current fiscal at Rs 4,179 crore was up by Rs 3,165 crore compared to Rs 1,014 crore in the same quarter last year logging a whopping 312 percent growth,” the PSU said.

In the second quarter as well, CIL achieved 118 percent utilisation breaching the provisioned target of Rs 3,527 crore. The government had recently asked CPSEs, including CIL, to speed up their capital expenditure to boost growth especially by the end of the second quarter of 2020-21.

Robust capex spending due to sustained project development, investments

CIL’s capex spend during the first half of the ongoing fiscal was a little over half of the planned expenditure of Rs 10,000 crore for the full fiscal. Coal Minister Pralhad Joshi has been closely monitoring the progress of processes like land acquisition, setting up of rail logistics and associated infrastructure and mine development of especially mega mine projects and speeding them up.

Payments were made for acquisition of land post-COVID unlock. Major high value tenders could be concluded on time and heavy earth moving equipment (HEMM) was procured. CIL’s robust capex spending came on the back of these issues.

Among the major heads, purchase of HEMM at Rs 1,360 crore accounted for 27 percent of the total capex of the first half. It was followed by payments for acquisition for mining operations which made up close to 26 percent of the capex where CIL spent Rs 1,289 crore. Setting up important rail lines and developing sidings constituted around 21 percent of the H1 capex.

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CIL spent Rs 1,078 crore under this head. These three heads combined at Rs 3,726 crore made up for around 74 percent of the first half’s entire capex. The components for the rest 26 percent or Rs 1,297 crore include mine development, coal handling plants, silos, roads, exploration and prospecting, other plant and machinery and joint venture investments.

“Land acquisition on fast track mode with the support of Ministry of Coal and modernisation of equipment and deployment of it in OC mines will pave way for ramping up our production, productivity. Concurrent development of rail and other logistics will boost evacuation facilities to transport increased output,” the official said.

Coal India accounts for over 80 percent of domestic coal output.

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