Coal Ministry to deploy integrated logistics strategy to reduce reliance on road transportation

Coal Ministry to deploy integrated logistics strategy to reduce reliance on road transportation

Updated – March 01, 2024 at 10:28 AM.

The Ministry anticipates traffic movement to also grow in tandem to meet the demand for coal

Coal Minister Pralhad Joshi while launching the integrated coal logistics plan on Thursday, said that the government’s aim is to bring down road transportation with thrust on ramping up railways and port infrastructure to meet the rising demands of the critical commodity.

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India’s power demand is likely to grow at a healthy rate over the next decade aided by rising industralisation. The Ministry anticipates traffic movement to also grow in tandem to meet the demand for coal considering that Odisha, Chhattisgarh, Jharkhand and parts of Madhya Pradesh account for around 75 per cent of the total dispatch.

“We are investing in a huge way on railway infrastructure. Also for coastal shipping, we are consulting the Shipping Ministry. If need be, we are ready to invest there as well. We are working on what can be done upto 2030. The main consensus amongst the coal business is, the movement of logistics should be done mostly through rail and coastal shipping,” Joshi told businessline.

It is imperative for logistics to meet the escalating energy demand projected to surge to 1.5 billion tonnes by 2030. The logistics plan proposes a strategic shift towards a railway-based system in first mile connectivity (FMC) projects, aiming for a 14 per cent reduction in rail logistic costs and an annual cost saving of ₹21,000 crore, he added.

Reducing reliance on roads

Emphasising on the importance of seamless coal evacuation in an eco-friendly manner, Coal Ministry Additional Secretary M Nagaraju said that roads currently account for around 27 per cent of the total transportation.

“We want to reduce it to the bare minimum. Our idea is to reduce and possibly eliminate road transportation,” he added.

To achieve this, Coal Secretary Amrit Lal Meena explained that the focus is to enhance railways and ports infrastructure.

“Major thrust will be to augment rail infrastructure, including de-congestion of railway lines. Also, for plants located in coastal regions, coastal evacuation of coal will be done. First mile connectivity (FMC) and mechanised handling as well as digitising the whole process will be promoted,” he added.

In line with this, the logistics policy focuses on smart coal logistics involving integration with Freight Operations Information Systems (FOIS), tracking, Artificial Intelligence (AI) and analysis. This will help to achieve outcomes such as visibility across logistics chains, monitoring asset utilisation and providing advanced analytics.

Thrust on Railways

The Coal Minister said the aim of the Coal Logistics Plan and Policy is to optimise the evacuation processes.

The Ministry has already launched 15 railway projects to address multimodal connectivity gaps. Among these, 5 projects have already been commissioned, he added.

Besides, coal companies have taken up a total of 103 FMC projects of 1,051 million tonnes (MT) capacity, incurring a cost of ₹24,000 crore, out of which 31 FMC projects of 291 MT capacity have been completed.

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“This transformative approach is expected to minimise air pollution, alleviate traffic congestion, and reduce carbon emissions by approximately 1,00,000 tonnes per annum. Moreover, a 10 per cent saving in average turnaround time of wagons nationwide is expected,” Joshi noted.

Additionally, aligned with PM Gati Shakti, 37 critical railway projects have been identified to meet the future coal evacuation demand.

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