Freight earnings too saw a decline of Rs 8,284 crore to Rs 13,412 crore in the first two months of FY21, compared to Rs 21,696 crore during the same period last year.
The earnings from the coal sector saw a decline of Rs 5,313 crore to Rs 5,720 crore, compared to Rs 11,033 crore in the corresponding period last fiscal year.
The decline in coal freight traffic is mainly because of a fall in power demand. State-run Coal India (CIL) saw its sales falling by 23 per cent in May and 26 per cent in April as power utilities purchased less coal because of a fall in demand and higher stockpile.
At the same time, power generation in May dropped 14.3 per cent, and the overall power demand for FY21 is expected to drop for the first time in 36 years.
CIL said thermal units were flush with coal stocks sufficient for as long as 28 days. “Many of the thermal plants have requested CIL to regulate coal supplies to them,” it said.
CIL has now decided to go slow on mining. As demand has fallen, CIL has shifted its focus to remove the overburden, rather than mining. All the subsidiaries have stalled mining operations. Recently, CIL also offered to substitute thermal units’ imported coal supply with domestic coal. Among other commodities, iron ore saw a drop of 7 MT in loading and led to a drop of Rs 763 crore in freight earnings during the period under review.
Other commodities that saw a fall in loading include cement by 6 MT, clinker by 3 MT and pig iron and finished steel by 3 MT.
The only commodity that saw an increase in movements was foodgrains. During the period under review, foodgrains traffic saw an increase of 5 MT, and earnings from foodgrains rose by Rs 606 crore.