Indian Railways and Coal: An Unsustainable Interdependency

Abstract

The majority of India’s coal reserves are concentrated in the eastern parts of India, while consumption of coal is scattered all across the country. Because of this uneven geographical distribution in coal supply and demand, transportation of coal plays an important role in the ecosystem. In FY 2017, the total raw coal supplied3 in India was 842 million tonnes (MT) (Ministry of Coal, 2017), of which 533 MT (Railway Board, 2018) was transported through railways. The volume of coal carried by Indian Railways (IR) was 48 per cent of its total freight in tonnes, and accounted for 45 per cent of its total freight revenue. Coal users and the railways would both collapse without the other. More than volumes and financials, the relationship between coal and railways runs deep at an institutional level. A senior railways officer is deputed to Coal India Limited (CIL) for coordination, and CIL members work closely with the traffic division of railways. The process is relatively plan-oriented and schedules for traffic are projected a year ahead or even further. There are limited market-oriented mechanisms for allocation of transportation capacity – all end-users can ask for railways haulage as available. Any short-term shock to the system like heavy regional rains, low hydropower output, or diminished RE output during the windy season can cause an imbalance beyond the buffer capacity of the system. More importantly, even buffers, e.g., the minimum stockpiles of coal that all power plants are expected to maintain, are often not enough.