CIL delegation in talks to clinch Rs 1,900cr Japanese loan

Monday, August 18 1997

CIL delegation in talks to clinch Rs 1,900cr Japanese loan

Sunil Mukhopadhyay

Calcutta, Aug 17: A three-member Indian delegation led by Coal India Ltd (CIL) chairman PK Sengupta left for Tokyo on Saturday to participate in the final round of negotiations for a $530 million (Rs 1,900 crore) Japan Exim Bank loan, according to a highly-placed source in the company.

This amount is part of the $1.06-billion loan already agreed upon by the International Bank for Reconstruction & Development (IBRD) in July. The loan will be used in the various rehabilitation projects of the Indian coal sector, covering 25 open-cast mines in 10 coalfields in five states.

Of the $1.06 billion package, IBRD has agreed to provide 50 per cent or $530 million while the remaining will come from the Japan Exim Bank. The entire loan will be spent over the next five years and will take care of a significant portion of the Rs 13000-crore investment proposed by CIL in the Ninth Five-Year Plan. Both IBRD and Japan Exim Bank loans have to be repaid in dollars in 40 half-yearly instalments over 25 years including a grace period of five years. The entire fund will primarily be used to finance the cost of equipment replacement in 15 mines; expand five mines; build five new mines and buy telecommunication equipment, the source said.

CIL will have the overall responsibility for implementing the projects. Among the new mines, Parej east under Central Coalfields Ltd (CCL) will have a capacity of 1.75 million tonnes per annum (mtpa), while Lakhanpur, Samleswari and Ananta, all under Mahanadi Coalfields Ltd (MCL), will have capacity of 5 mtpa, 3 mtpa and 1.5 mtpa respectively.

The mines that will be expanded are: KD Hesalong (from 1.69 mtpa to 3 mtpa) under CCL, Nigahi (from 3.60 mtpa to 10 mtpa) and Dudhichua (from 4.37 mtpa to 10 mtpa) under Northern Coalfields Ltd (NCL), Dipka (from 2.42 mtpa to 9 mtpa) under South Eastern Coalfields Ltd (SECL) and Bharatpur (from 3.71 mtpa to 5 mtpa) under MCL. Equipment replacement will be taken up in Rajrappa under CCL; Jhingurdah, Jayant and Bina under NCL; Durgapur, Niljai, Padampur, Sasti and Umrer under Western Coalfields Ltd; Gevra, Dhanpuri, Bisrampur, Kushmunda and Manikpur under SECL; and Belpahar and Jagannath under MCL. The completion of the projects will enable CIL to step up production by 28 mtpa to 112 mtpa.