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Coal India to spend Rs 700 cr on buying rail wagons

These CIL-owned rakes dedicated only for the transport of CIL’s coal will help us in pushing higher volumes of coal to the power sector, Coal India said
New Delhi: Coal India is planning to purchase rail wagons under general purpose wagon investment scheme at a cost of Rs 700 crore, the public sector undertaking (PSU) said on Thursday. “The Maharatna PSU’s board has given the green signal to procure 40 rakes at nearly Rs 700 crore. One rake comprises 59 wagons. According to a rough estimate, one rake can move 1.4 million tonne of coal per annum,” the company said.

Rakes will be dedicated for transport of coal

“These CIL-owned rakes dedicated only for the transport of CIL’s coal will help us in pushing higher volumes of coal to the power sector,” the miner said. The deployment of its own rolling stock by Coal India will free up railway capacity. Moreover, Coal India’s investment in rolling stock will help the cash-strapped railways earn higher freight revenue without any investment.

The backdrop

The decision comes a month after power producers urged Coal India to step up coal supply from Korba area in Chhattisgarh through rail wagons to help them reduce the transportation cost which would result in a lower tariff for end users.