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Coal India hikes transportation fees

State-run monopoly miner Coal IndiaBSE -0.60 % has increased the amount it charges its clients for transporting coal from the minefields to the loading points, a move that is likely to result in a hike of about 2 paise per unit in the price of power sold to households.

"We have been forced to hike the charges because diesel prices have increased substantially since the time we last adjusted this price in 2009," said Coal India's marketing director B Saxena, adding, "There has also been a rise in salaries and wages of employees and contract employees involved in transporting this coal."

As per the revised rates implemented from November 14, Coal India is charging Rs 57 per tonne instead of Rs 44 per tonne for 3-10 km. This spells an increase of 29.5% while the company has increased the surface transport charges for 10-20 km by nearly 51%, to Rs 116 per tonne from Rs 77 per tonne.

Almost all power producers will now have to pay more to Coal India because the distance between mines and loading points is usually 3-20 km. Loading points include coal stockyards and railway sidings from where Coal India's clients lift the fuel.

The revised rates imply that power producers will have to pay an additional Rs 55,000 for buying a rake of coal from Coal India in case the coal is transported between 3 km and 10 km. For loading points located between 10 km and 20 km, the additional outgo will be Rs 1.7 lakh per rake.

Source: The Economic Times