CIL’s Capex At Rs.10,717 Crores Posts 37% Growth In Apr-Dec’21

Capex is a key performance area which has a weightage value of 15% in performance evaluation under Memorandum of Understanding

Continuing to maintain the growth trend in its capital expenditure Coal India Limited (CIL) has incurred a capex of Rs. 10,717 crores till December of the ongoing financial year clocking a strong 37.4% year-on-year growth. Capex during April-December’20 was Rs.7,801 crores. The capex scale up comes at a time when the Centre has been exhorting the public sector entities to step up their annual capex. CIL’s capex spend during the referred period marks 86.3% of the progressive target achievement.

Capex is a key performance area which has a weightage value of 15% in performance evaluation under Memorandum of Understanding (MoU). CIL signs MoU with Ministry of Coal at the beginning of every financial year.
The three major heads at Rs.5,786 crores that accounted for 54% of the total capex during April-December’21 were land acquisition, procurement of heavy earth moving machinery (HEMM) and joint ventures – primarily Hindustan Urvarak Rasayan Limited and Talcher Fertilizers Limited.

Construction of coal handling plants, silos with Rs. 1,344 crores and rail sidings and rail corridors at Rs.1,785 Cores made up for 29% of CIL’s entire capex during the first nine months of the fiscal. CIL is focusing on increasing its evacuation capacity through rail mode by an additional 330 million tonnes per annum by FY 2024 through strengthening of its rail infrastructure.

Capital expenditure on land acquisition at Rs.2,490 crores, crucial for developing new and expansion mines achieved 121% of the progressive target by the end of December’21. The target for the period was fixed at Rs.2,057 Crores. Growth compared to last year same period was a whopping 54% under this head.

Procurement of HEMM at Rs. 2,031 Crores exceeded the progressive target of Rs.1,783 Crores by 14% during this period. CIL in a bid to replace its aging machinery with technologically advanced high capacity HEMM fleet of different types and sizes has been fast tracking the process in recent times. Primarily deployed in opencast mines, the major source of the company’s coal production, these machines would help in removal of overburden and ramp up the coal output.

“Our endeavour is to keep abreast of our capex targets. However, capex will be contingent on the demand for coal, sales realization, and production needs. The investments will be made accordingly,” said a senior executive of the company.

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