India working on improving fares for coastal shipping, revamps coal transport pricing

NEW DELHI : An inter-ministerial group is re-examining the mechanism to “improving” fares for transport of coal under the rail-sea-rail route, also called coastal shipping.

The idea is to make the fares “feasible” enough so that it can be used an alternative mode of evacuation, reduce carbon footprint and create infrastructure at ports that can be later leveraged for exports.

The inter-ministerial group includes the Coal Ministry, Railways, Ports, Shipping and Waterways Ministry, and Power Ministry.

“Discussions are on at an inter-ministerial level. There have been some issues that the Railways have been asked to look into which include working on rake rates and so on. The Shipping Ministry is working on the possibility of bringing down some charges like handling costs, berthing costs, and so on,” an official aware of the development has said.

Incidentally, the Railways have already responded to some of the queries raised by Ministry of Coal, ahead of a review meeting. For over an year now, Railways have been engaging with other concerned ministries on this.

“Responses to queries raised by Ministry of Coal have been sent. And some recommendation on the mechanism for determining price under coastal shipping is being worked out,” said another official.

Railways account for about 55 per cent of coal evacuation in the country, and the target is to increase this share to 75 per cent by FY30.

“Coal evacuation through alternative routes are to be explored with the target being 112 MT (of coal evacuation) by 2030,” an official said.

Currently, coal evacuation through the Rail-Sea-Rail route stands at approximately 40 MT.

The Railways is already stregthening evacuation capacity between Talcher coalfield and Paradip port by tripling and quadrupling the railway network along with auto signalling works.

Presently, for supply of coal from MCL (Paradip) to west Indian or north Indian thermal power plants, the total cost increases by around ₹2500 per tonne, over the all rail route.

The rail-sea-rail route is a multimodal transportation strategy integrating with the rail and sea routes for seamless coal transportation from mines to ports and then end-users.

The Union Coal Ministry had introduced this route in August last year.

Opting for Rail-Sea-Rail mode could potentially save around ₹760-1300 per tonne in logistics costs for end users located in Southern India, a study carried out by the Centre had previously said.

The possibility of using conveyors to transport coal from mines to coast is also being looked into.