Rail Budget 2013: Rail freight hike on coal may increase electricity tariffs
   
Quotes

Rail Budget 2013: Rail freight hike on coal may increase electricity tariffs

Last Updated: Tuesday, February 26, 2013, 17:27
 
 Comment 0
 
Rail Budget 2013: Rail freight hike on coal may increase electricity tariffs
New Delhi: The proposed increase in coal freight rate by 5.7 percent in the Railway Budget 2013-14 on Tuesday will have no effect on the coal sector but may lead to a marginal increase in the electricity tariffs.

Railways Minister Pawan Kumar Bansal sought to increase the freight rate on coal from Rs 685.10 per tonne, to Rs 724.80 - a hike of 5.79 percent.

Coal India Ltd (CIL) Chairman and Managing Director S Narsing Rao said: "Coal sector, including Coal India will have no effect due to increase in coal freight charges. However, the increase will borne by power generating companies and might lead to increase in electricity chargers."

He also said the increase may lead to higher landing cost for generating companies by up to 3 percent.

According to industry analyst the hike in coal freight charges will be neutral to coal sector but will hit downstream sector using coal such as power, cement and steel.

"The increase in freight charges would increase electricity tariff by less than one percent as freight is very small component of overall cost of electricity," Kuljit Singh Partner Ernst & Young said.

Bansal also said that the recently revamped participative policy enabling partnership with large mines, industry and investors addresses the specific concerns of private investors.

An investment of up to Rs 9,000 crore is expected under these projects including Rs 4,000 crore for coal mine connectivity.

Analysts welcomed it saying that lot of problems were being faced by coal companies in offtake from these mines.

"This is a good step and it would help in more evacuation of coal," Singh said.

The average daily rake loading last month by CIL, which accounts for 80 percent of domestic coal production, was 210 rakes as against 185 rakes in January last year.

PTI


First Published: Tuesday, February 26, 2013, 17:07


Comments


comments powered by Disqus
Mahindra SUV TUV300 launched
Mahindra SUV TUV300 launched
Apple launches new iPhone 6S
Apple launches new iPhone 6S
Ford Figo Aspire
Ford Figo Aspire
Samsung Galaxy S6 Edge Plus, Note 5
Samsung Galaxy S6 Edge Plus, Note 5
Maruti Suzuki S-Cross
Maruti Suzuki S-Cross

Contact Us : Privacy Policy : Legal Disclaimer
Copyright © Zee Media Corporation Ltd. All rights reserved