CIL’s capex grows 8.5 percent y-o-y in April-July period

CIL’s capital expenditure at Rs 4,700 crores at the end of July clocked a growth of 8.5 percent year-on-year
CIL’s capex grows 8.5 percent y-o-y in April-July period
CIL’s capex grows 8.5 percent y-o-y in April-July periodEnergy Watch

New Delhi: With Coal India Limited (CIL) continuing to invest heavily in evacuation infrastructure, land and mining machinery, the PSU’s capital expenditure at Rs 4,700 crores at the end of July clocked a growth of 8.5 percent year-on-year, said CIL in a statement. The capex utilisation during the referred period was nearly 100 percent of the progressive target of Rs 4,754 crore and 28.3 percent of the annual target of Rs 16,600 crores for FY24.

Typically, the capex starts slow in the first quarter, with the company laying out expenditure plans at the beginning of the fiscal, and gradually builds up in the subsequent quarters. What makes the 8.5 percent capex growth in April-July period of the current financial year significant is that it came over a high base of Rs 4,332 crores achieved during the same period of FY23. The last year was also the year when CIL’s capex peaked to an all-time high of Rs 18,619 crore.

CIL’s capex jumps three-fold in last 3 yrs

“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 percent. From Rs 6,270 crore in FY20, the capex shot up sharply to Rs 18,619 crore in FY23,” said a senior official of CIL.

Coal India spent the most on land followed by HEMMs

Land was the major expenditure head at Rs 1,311 crore, accounting for 28 percent of the total capex spend during April-July 2023. This was closely followed by the procurement of heavy earth moving machinery (HEMM) that took up Rs 1,083 crore or 23 percent. Land acquisition and strengthening the modernised 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 the construction of rail sidings and corridors at Rs 4,169 crore is the highest among the capital expenditure heads for the entire FY24, said Coal India.

CIL to spend Rs 2,907 cr on land acquisition this year

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 FY24. The rest would be incurred 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.

Energy Watch