Coal Logistics Transformation: Government Accelerates FMC Projects, Targeting 75% Rail Transport by FY2030

Coal Logistics Transformation: Government Accelerates FMC Projects, Targeting 75% Rail Transport by FY2030​

The Ministry of Coal is aggressively expanding its logistics network through various First Mile Connectivity (FMC) and rail projects. These massive infrastructure undertakings are designed to build a resilient, cost-effective ecosystem for coal transportation across India. The initiative aims to significantly reduce the dependence on high-cost road movement, ensuring reliable supply from mines to end-users.

Progress in First Mile Connectivity and Rail Evacuation​

The Ministry of Coal has initiated 139 FMC projects alone, targeting a cumulative capacity of 1,319 million tonnes per annum (MTPA) by the close of FY 2029-30. A total of 72 of these mechanized coal handling projects have already been successfully commissioned. The remaining projects are currently undergoing tendering and implementation phases, with completion slated for FY 2030.

Regarding railway infrastructure expansion, out of eight identified rail projects, five have been commissioned. The Ministry plans to complete the remaining three critical railway projects by FY 2028. Furthermore, MOC has specified 33 crucial projects that require attention from the Ministry of Railways to facilitate future coal evacuation needs.

Strategic Shift Towards Multimodal Transport​

To streamline the supply chain, the Ministry, along with the Ministry of Railways and other key ministries, launched an Integrated Coal Logistics Plan. This comprehensive strategy seeks to create a technology-enabled logistic ecosystem for better multimodal transport. A core component of this plan is setting an ambitious target: increasing the share of coal transported through railways to 75% by FY2030.

The plan actively promotes diversification through coastal shipping and inland waterways, thereby reducing reliance on single transportation modes. Coal movement via Rail-Sea-Rail (RSR) mode is being encouraged to lower consumer logistics costs. CIL has reduced the Performance Incentive (PI) for coal supplies beyond ACQ from 40% down to 20% to boost RSR adoption.

Challenges Persist in Coal Evacuation Process​

Despite significant progress, several bottlenecks have been identified that impede the smooth evacuation of coal from pitheads. These challenges include general rail congestion and inadequate rail capacity on high-density routes. Operational limitations relating to the placement and availability of railway rakes also pose a constraint.

Other critical issues revolve around clearances and infrastructure development. Delays in obtaining land, forest, and environmental sanctions are noted hurdles for executing necessary railway projects. Additionally, road congestion and associated environmental concerns linked to truck transport remain major factors that need mitigation.

Augmenting Capacity and Improving Efficiency​

The advancements in rail connectivity and FMC projects are directly contributing to improved operational efficiency across the coal supply chain. Mechanized loading through silos and rapid loading systems has been successfully implemented. This modernization reduces rake loading time, leading to better wagon utilization and minimizing transit and handling losses.

This coordinated effort among the Ministry of Coal, Ministry of Railways, and power sector stakeholders ensures sustained coal dispatch. The ongoing development of FMC and multimodal infrastructure is expected to further reduce logistics costs and support projected domestic coal production increases up until FY 2029-30.