The Indian government has allowed the public sector undertaking (PSU) steel manufacturers Steel Authority of India Ltd. (SAIL) and Rashtriya Ispat Nigam Ltd. (RINL) to charter ships directly for importing coking coal without going through state-owned Transchart on the lines of dispensation given to oil firms, reports said.
"This decision will help in meeting the shortfall in the domestic availability of coking coal," said an official statement following the Cabinet meeting.
Currently, imports by the steel PSUs are done through ships chartered by Transchart, operated by Shipping Corp of India.
Exemption of chartering ships through Transchart was given to SAIL and RINL. As a results, they will have better control of logistics, shipping and operations of importing coal and other raw material from overseas, the statement said.
SAIL and RINL had been pleading for freedom to charter hire vessels on their own to improve operational efficiency and save cost.
By circumventing Transchart, SAIL and RINL would be able to bring down transportation costs, particularly when their import bill is set to rise manifold following on-going capacity expansions.
Presently, SAIL and RINL import around 14-15 million tonnes of coking coal annually,
As SAIL is expanding capacity to 23.46 million tonnes per annum and RINL doubling it to 6.3 million tonnes, there cumulative imports would likely to go up to over 60 million tonnes by 2020.
SAIL currently imports around 10 million tonnes of raw material currently. As per projections, SAIL's imports would go up to 15-16 million tonnes by 2015-16 and to 45 million tonnes by 2020.
RINL, which is imports around 4 million tonnes of raw material, may import 18 million tonnes by 2020, sources said.
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