Team News Riveting
Kolkata, August 16
With Coal India Limited (CIL) continuing to invest heavily in evacuation infrastructure, land, and mining machinery, the company’s capital expenditure at Rs 4,700 crore ending July of the current financial year 2023-24 (FY24) clocked 8.5 per cent year-on-year growth.
The capex utilization during the referred period was nearly 100 per cent of the progressive target of Rs 4,754 crore and 28.3 per cent of annual target of Rs 16,600 crore of FY 2024.
Typically the capex starts slow in the first quarter with the company laying out the expenditures plans at the beginning of the fiscal and gradually builds up in the subsequent quarters. What makes the 8.5% capex growth in April-July FY 2024 significant was it came over a high base of Rs 4.332 crore of same period FY 2023, the year when CIL’s capex peaked to an all-time high of Rs 18,619 crore.
“At a time when the Centre has been directing the CPSEs to scale up their capital expenditure for economic revival, CIL in a span of three years has stepped up its capex by three fold or 197 per cent. From Rs 6,270 crore in FY 2020 the capex shot up sharply to Rs 18,619 crore in FY 2023” said a senior official of CIL.
Land was the major expenditure head at Rs 1,311 crore accounting for 28 per cent of the total capex spend of April-July 2023. This was closely followed by the procurement of heavy earth moving machinery that took up Rs 1,083 crore or 23 per cent.
Land acquisition and strengthening the modernized mining fleet are twin essentials for sustaining the production tempo especially when the company is faced with stiff targets.
Capex on construction of rail sidings and rail corridors and coal handling plants and silos, for faster evacuation of coal, was Rs 664 crore and Rs 572 crore respectively.
Underscoring the company’s resolve to shore up evacuation infrastructure the budgeted provision for construction of rail sidings and corridors at Rs 4,169 crore is the highest among the capital expenditure heads for entire FY 2024.
For land acquisition a total amount of Rs 2,907 crore was identified for the ongoing fiscal year. While construction of CHPs/Silos is pegged at Rs 2,174 crore, procurement of HEMM would take up Rs 1.965 crore in FY 2024. Rest would be on other heads like plant and machinery; solar projects, JVs and coal washeries.
“Our production is poised to increase substantially in the ensuing years and it is vital to align it with seamless coal transportation. This necessitates heavy investment in coal evacuation infrastructure and first mile connectivity projects with CHP/silo combination”, said the official.
