Railway minister DV Sadananda Gowda has presented his maiden Railway Budget 2014-15 on Tuesday. The newly elected Government of India (GOI) has stated that it would priorities and set timelines for completion of ongoing projects. Notably, 'coal connectivity' gets a specific mention in the Railway Minister's budget.
''While an outlay for coal connectivity was mentioned in the FY2013-14 Budget Speech, there was no mention of the same in the FY14-15 interim Rail Budget speech by the previous government. Specifically identifying build-out of the coal connectivity trunk lines in Jharkhand (Tori-Shivpur- Kathautia), Odisha (Jharsuguda-Barpalli-Sardega) and Chhattisgarh (Bhupdeopur-Raigarh-Mand) is encouraging,'' said Nomura Financial Advisory and Securities.
''In this context, as per a June 2014 media report (Press Trust of India) citing Railway documents, the revised timelines for the Jharkhand, Odisha and Chhattisgarh projects are Dec-16, Jun-16 and Sep-16, respectively,'' it said.
''Ceteris paribus, landed cost of coal for Railways-fed power projects would rise biannually on account of the Fuel Adjustment Component (FAC) linked freight tariff reset.''
''Prima facie, setting up of Project Monitoring Groups (PMGs) comprising officials of GOI, state governments and professionals to expedite progress on the ground level is a much needed step in the right direction,'' said Nomura.
''We maintain that the impetus of the GOI to augment domestic coal availability augurs well for most participants in the coal/power value chain - Coal India (COAL IN, Buy), NTPC (NTPC IN, Buy) and IPPs would be the key beneficiaries,'' it opined.
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