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An overview on Thermal coal logistics and Port dynamics Page 1 of 26
An Overview on Thermal Coal Logistics
& Changing Port Dynamics in India
Presented by: Satya Pal
Business Analyst, MD office
Sical Logistics Ltd
An overview on Thermal coal logistics and Port dynamics Page 2 of 26
Disclaimer: The analysis done is as per the understanding of the author about the industry.
Information in this report has been sourced from newspapers, trade journals, white papers,
industry portals, government agencies, monitoring industry news and developments, and
through access to databases. Analysis methods used include historical trend analysis,
judgmental forecasting, and cause and effect analysis. Any facts/numbers if misquoted is
purely incidental. The author of the document is just trying to present his own ideas as
what the company can consider for the future.
An overview on Thermal coal logistics and Port dynamics Page 3 of 26
Executive summary:
India, Asia’s 3rd
largest economy is fighting all odds to fulfill its promise of supplying
power to all by adding 1 lack MW by 2012. While the coal dominates India’s energy
basket and will continue to do so, it opens up a huge business potential for a logistics
service providers.
Demand generators of thermal coal:
Unlike the source of coal, which is mainly concentrated in the eastern part of India, the
power generating companies are scattered all through out the country. Around 56% of the
coal logistics is done by railway, only 5% of indigenous coal is handled through port, but
at the same time around 50% of the volume of major ports is contributed by indigenous
coal. This shows the inefficiency of major ports in India.
But the scenario is changing; with modern ports coming up in BOT basis also the
upcoming power plants are being strategically located near ports to use imported coal as a
fuel. We will try to anticipate the paradigm shift in this paper.
Origin and alternate sourcing of thermal coal:
Coal India limited and its subsidiaries are the major producers of coal. 257.754 million
Tonnes (provisional) of coal were produced by Coal India Ltd. and its subsidiaries during
2007-08(April-December) Singareni Collieries Company Limited (SCCL) are the main
source for supply of coal to the southern region.
Though the price of indigenous coal is much cheaper than the imported coal, but the high
calorific value and low ash content of imported coal reduces overall logistics cost
drastically, making it a feasible and alternate choice. Apart from calorific value,
unavailability of railway rakes and coal linkage are the other big issues with power
generating companies, dealing with domestic coal for their production.
Transportation channels- changing trend:
Apart from the quantity issue, untimely delivery of coal has also resulted into stock outs
in many thermal plants. In fact the inefficiency in thermal coal logistics is the major
cause of concern for the Indian power sector. Railway is the largest logistic provider for
delivering coal/coal products to consumption points and there are two main reasons to
this-
The consumption / supply points are mostly located at long distance from the mine.
This essentially requires a solid material handling and bulk distribution system
In this research we have captured the present traffic of thermal coal through various
ports. Also, in light of increasing thermal coal demand and upcoming key projects in
Indian port sector, we have attempted to analyze the probable shift of coal traffic among
various ports.
An overview on Thermal coal logistics and Port dynamics Page 4 of 26
Executive summary:............................................................................................................ 3
Maps:................................................................................................................................... 5
Tables:................................................................................................................................. 5
1. Demand generators: ........................................................................................................ 6
1.1 Thermal Power Plants- Present and future scenario:................................................ 6
1.2 Thermal Power Plants- State wise: ........................................................................... 8
Maharashtra................................................................................................................. 8
Gujarat......................................................................................................................... 8
Andhra Pradesh........................................................................................................... 8
Tamil Nadu ................................................................................................................. 8
Orissa .......................................................................................................................... 8
Rajasthan..................................................................................................................... 8
West Bengal................................................................................................................ 8
Uttar Pradesh & Bihar................................................................................................. 9
2. Source: .......................................................................................................................... 10
3. Transportation channel: ................................................................................................ 12
3.1 Present port scenario:.............................................................................................. 13
3.2 Port scenario- State wise:........................................................................................ 15
Gujarat....................................................................................................................... 15
Maharashtra............................................................................................................... 15
Andhra Pradesh......................................................................................................... 16
Karnataka.................................................................................................................. 17
Tamil Nadu ............................................................................................................... 17
Orissa ........................................................................................................................ 18
3.3 Key projects coming up at major and Non-major ports:......................................... 19
4.0 Changing trend a probable shift in coal traffic: .......................................................... 21
Maharashtra: ............................................................................................................. 22
Gujarat: ..................................................................................................................... 22
Andhra Pradesh:........................................................................................................ 23
Tamil Nadu: .............................................................................................................. 23
Orissa: ....................................................................................................................... 23
Rajasthan:.................................................................................................................. 24
West Bengal:............................................................................................................. 24
UP & Bihar: .............................................................................................................. 24
Exhibits:............................................................................................................................ 25
Exhibit 1: State wise Thermal Power Plants..................................................................... 25
Exhibit 2: Present & upcoming thermal power plants, coal sources and present &
upcoming ports.................................................................................................................. 26
An overview on Thermal coal logistics and Port dynamics Page 5 of 26
Maps:
Figure 1.1.1: Existing Thermal Power Plants
Figure 1.1.2: Upcoming Thermal Power Plants
Figure 2.0.1: Source of Indigenous Thermal Coal
Figure 3.1.1: Existing Major & Non-major ports
Figure 3.2.1: Ports of Gujarat
Figure 3.2.2: Ports of Maharashtra
Figure 3.2.3: Ports of Andhra Pradesh
Figure 3.2.4: Ports of Karnataka
Figure 3.2.5: Ports of Tamil Nadu
Tables:
Table 1.1.1: Upcoming UMPP
Table 3.0.1: Major Ports in India & comparison of coal with other commodities
Table 3.1.1: State wise coal traffic at Non-major ports
Table 3.1.2: State wise summary of Major & Non-major ports
Table 3.3.1: Upcoming Key projects at Major ports
Table 3.3.2: Upcoming Key projects at Non major ports
Table 4.0.1: Coal traffic trend at Non-major ports
Table 4.0.2: Imported coal based plants and probable shift in port traffic
An overview on Thermal coal logistics and Port dynamics Page 6 of 26
1. Demand generators:
1.1 Thermal Power Plants- Present and future scenario:
With around 52% of India’s total power generation currently based on coal, the power
sector is the major consumer of the fossil fuel in the country. Absorbing nearly 78% of
the total domestic production, coal demand in India is expected to grow rapidly as the
country seeks to add 78,000MW of generating capacity during 11th
five year plan.
At present there are around 130 thermal power plants operational in India and roughly 69
more is expected in next few years. Apart from these there are also plans for the capacity
addition and R&M for the existing thermal power plants.
As per our desk research based on secondary data and certain assumptions, present
demand for thermal coal in India is roughly 484 million tones per annum, while the future
additional demand is going to be around 790 million tones per annum, out of which 623
million tones will go to upcoming projects and rest for capacity addition.
The Ministry of Power, Govt. of India in association with CEA & PFC has launched an
initiative for development of nine coal-based
Ultra Mega Power Projects of about 4000 MW
capacity. Out of these nine UMPPs, four are
proposed to be set up at pit head sites, one each
in Madhya Pradesh, Chhattisgarh, Orissa and
Jharkhand and five to be set up at coastal sites
one each in Gujarat, Karnataka, Maharashtra,
Andhra Pradesh and Tamil Nadu. It is proposed to set up pithead projects as integrated
Figure 4.1.1: Existing Thermal Power Plants Figure 1.1.2: Upcoming Thermal Power Plants
Table 1.1.1: Upcoming UMPP
An overview on Thermal coal logistics and Port dynamics Page 7 of 26
with corresponding captive coal mines while for the coastal projects, imported coal shall
be used.
An overview on Thermal coal logistics and Port dynamics Page 8 of 26
1.2 Thermal Power Plants- State wise:
As evident from the Exhibit 1, UP, West Bengal and Maharashtra are the top three states
in terms of thermal power generation, where the later two states are coastal state. Thermal
power plants are operational in all parts of the country; hence not all the power plants are
dependent on imported coal. For the purpose of this report we will limit our discussion
only for the power plants which depends upon imported coal.
Maharashtra
Power plants of Tata Power, Reliance Infrastructure Ltd and MSEB use some amount of
imported coal for running their power plants. Ports in the state currently handling coal
traffic include Mumbai, Dahanu and Dharamtar.
Gujarat
There are about five power plants in Gujarat, which rely on some amount of
imported coal. They are the Sabarmati TPS, Gandhinagar TPS, Sikka TPS, Ukai TPS
and the Wanakbori TPS. Adani Power Station commenced operations in 2009, whereas
the Tata UMPP is expected to commence by 2012, both plants are based on imported
coal.
Andhra Pradesh
Ramagundam TPS operated by APGENCO and Simhadri TPS operated by NTPC meet
some of their coal requirements through imports.
Tamil Nadu
The four power plants of Tamil Nadu meet some of their coal requirements through
imports. These are the Ennore TPS, Mettur TPS, North Madras TPS and Tuticorin
TPS, all operated by TNSEB.
Orissa
The Talcher TPS (Orissa) operated by NTPC is meeting some of its coal requirements
through imports. Currently, Paradip is the only port in the state that is handling coal
traffic.
Rajasthan
RRVVNL operates the Suratgarh TPS. Since the state does not have any operational
ports, the power plant sources its requirements from the ports in Gujarat.
West Bengal
The Farakka TPS is located in the state of West Bengal. Currently, only the Haldia port
handles traffic of thermal coal in the state.
An overview on Thermal coal logistics and Port dynamics Page 9 of 26
Uttar Pradesh & Bihar
The National Capital Power Station and the Kahalgaon TPS located in Uttar Pradesh and
Bihar, respectively meet their coal requirements through the port of Haldia.
An overview on Thermal coal logistics and Port dynamics Page 10 of 26
2. Source:
The major coalfields in India lie on its eastern part, unlike thermal power plants which
are spread all across the India.
The coal industry is a highly-regulated industry which gives it a monopolistic character.
Only government-owned/managed/controlled companies are eligible to mine and trade
coal without the restriction of captive consumption. Coal India Limited (CIL) and
Singareni Collieries Company Limited (SCCL) account for nearly 92 percent of the total
coal produced in the country.
The salient features of the Indian coal industry
• India is the third largest producer of coal in the world.
• Coal is one of the primary sources of energy, accounting for about 67% of the total
energy consumption in the country.
• India has the fourth largest reserves of coal in the world (approx. 197 billion
tonnes.).
Figure 5.0.1: Source of Indigenous Thermal Coal
An overview on Thermal coal logistics and Port dynamics Page 11 of 26
• Coal deposits in India occur mostly in thick seams and at shallow depths. Non-
coking coal reserves aggregate 172.1 billion tonnes (85 per cent) while coking coal
reserves are 29.8 billion tonnes (the remaining 15 per cent).
• Indian coal has high ash content (15-45%) and low calorific value.
• With the present rate of around 0.8 million tons average daily coal extraction in the
country, the reserves are likely to last over 100 years.
• The energy derived from coal in India is about twice that of energy derived from
oil, as against the world, where energy derived from coal is about 30% lower than
energy derived from oil.
• As of 2003, India has 19 coal washeries (total capacity:27.2 million tonnes per
annum) of which 15 are owned by CIL.
Power demand in the country touched an all-time high of 99,027 MW recently, a year-on-
year growth of over 16%. It is expected that the demand will further soar up to as much
as 315,000 MW by 2017 at an average GDP growth rate of 8% per year, which is more
than double the demand for power from now.
Coal India Limited (CIL) (which have 8 subsidiaries) and Singareni Collieries Company
Limited (SCCL) account for nearly 92 percent of the total coal produced in the country.
Existing thermal coal demand for power generation in India is around 484 million tones
per annum, out of which approximately 22 million tones of thermal coal are being
imported yearly. Coal India Ltd (CIL), which currently meets 82% of the power sector’s
thermal coal demand, will not be able to keep pace with the power sector’s incremental
need because of hurdles in developing new mining projects. So the ministry wants to
encourage the power sector to go for larger imports, in 2008-09, India’s total thermal coal
imports were 37.92 million tones.
Having said so much about indigenous coal supply demand mismatch, there are also an
option of importing coal. This trend is catching up in recent past as the quality of the
imported coal from Australia, Indonesia or south Africa is much superior that that of
domestic coal allocated to the power utilities, which in turn reduces the transportation and
handling charges.
An overview on Thermal coal logistics and Port dynamics Page 12 of 26
3. Transportation channel:
Around 56% of the coal logistics is done by railway, only 5% of indigenous coal is
handled through port, but at the same time around 50% of the volume of major ports is
contributed by indigenous coal. This shows the inefficiency of major ports in India.
Table 3.0.1: Major Ports in India & comparison of coal with other
commodities
An overview on Thermal coal logistics and Port dynamics Page 13 of 26
3.1 Present port scenario:
There are total 12 Major and 187 Non-major ports in India as of now. Capacities of some
of the non major ports are better than that of the major ports. States like Maharashtra,
Gujarat, Kerala, Andhra Pradesh, Tamil Nadu, Karnataka and Goa are coming up with
green field projects in port infrastructure, while existing ports are going ahead with
capacity addition.
In 2007-08, country handled around 79 million tones of coking and thermal coal at major
and non-major ports. Main source of coking coal is Australia, while that of non coking
coal is Indonesia.
Table 3.1.2: State wise summary of Major & Non-major portsTable 3.1.1: State wise coal traffic at Non-major ports
An overview on Thermal coal logistics and Port dynamics Page 14 of 26
Key ports handling coal traffic includes major ports of Paradip, Vizag, Ennore, Tuticorin
and non major ports of Bedi, Bhavnagar, Jafrabad, Magdalla, Navlakhi, Mundara,
Dahanu and the recently set up ports of Gangavaram and Krishnapatnam. Around 95% of
coal is transported through rail from ports and the rest through road. Key factors taken
into account while selecting a port for handling coal include nearness to the plant,
operating efficiencies at the port, facilities to handle coal at the port and total port
charges. Coal is usually transported in panamax and handy max vessels. Some ports have
dedicated terminals to handle coal traffic while rest use general cargo berth for the coal,
naturally among the power generating companies former one is preferred.
Figure 6.1.1: Existing Major & Non-major ports
An overview on Thermal coal logistics and Port dynamics Page 15 of 26
3.2 Port scenario- State wise:
As shown in the table 3.1.2, Gujarat has the maximum number (21) of operational
non-major ports in the country followed by Tamil Nadu and Maharashtra. Although,
Maharashtra has the highest number of non-major ports, most of them are not operational.
Out of the total traffic handled, nearly 72.5 per cent is handled by ports in Gujarat.
Although, setting up of non- major ports in other states has resulted in a marginal
decline in the share over the years of total traffic in Gujarat, yet it remains the largest
contributor.
Gujarat
The state of Gujarat has one major port (Kandla) and 41 non-major ports. The state
enjoys a strategic location advantage in terms of being the nearest maritime outlet from
India to Africa, West Asia, and Europe.
Sikka is the largest
non-major port in
Gujarat, having a
share of 41 per cent
of the total traffic at
70 million tones.
Mundra and Magdalla
also feature among
the other big non-
major ports in the
state.
In 2007-08, non-
major ports in the
state of Gujrat
handled nearly 71 per
cent of the total
traffic of non- major ports in the country. The hinterland of Gujarat ports extends up to
the northern and central India covering the states of Gujarat, Rajasthan, Haryana, Punjab,
Madhya Pradesh, Uttar Pradesh, Jammu & Kashmir and Himachal Pradesh. In 2007-08,
the capacity of the non-major ports in Gujarat was 197 million tones, whereas the traffic
handled was around 148 million tones, resulting in a capacity utilization of 75 per cent.
POL has the largest share of the traffic while coal and general cargo constitutes the other
key commodities handled by the non-major ports in the state.
Maharashtra
There are 53 ports that stretch across the entire length of the coastline. The distant
hinterland of the port stretches to far north to Himachal Pradesh, Punjab, Haryana,
Rajasthan, Western UP and Delhi; and Madhya Pradesh, and Chhattisgarh to the East.
The adjacent hinterland includes the industrial belt of Mumbai, Thane, Roha and parts of
Maharashtra.
Figure 3.2.1: Ports of Gujarat
An overview on Thermal coal logistics and Port dynamics Page 16 of 26
In 2007-08, the non-major ports of Maharashtra handled traffic of 11.61 million tones, an
increase of 0.4 per cent
over the previous year. Iron
ore forms a major portion
of traffic handled by the
non-major ports while coal
and building materials form
the other key constituents
of traffic of the ports in
Maharashtra. The important
non-major ports in
Maharashtra are the ports
of Dharamtar and Ulwa-
Belapur. Dharamtar port
enjoys a 56 per cent share
in the total non-major
traffic of the state. Ulwa-
Belapur handled traffic of
1.4 million tones during the
year, thus having a 12 per
cent share in the total
traffic.
Andhra Pradesh
The state of Andhra Pradesh has 13 ports that stretch across the length of the coastline out
of which one is a major port (Vizag), the remaining being non-major.
The states of Chhattisgarh,
Madhya Pradesh, Northern
Karnataka, and Western
Maharashtra and South
eastern Orissa comprise of
the key hinterland markets
for the ports in this state. In
2007-08 the non-major
ports of this state handled
around 10 per cent of the
total traffic handled by non
major ports in the country.
POL forms a major portion
of traffic handled by the
non-major ports.
Key non-major ports
include the ports of
Kakinada Anchorage,
Figure 7Figure 3.2.2: Ports of Maharashtra
Figure 3.2.3: Ports of Andhra Pradesh
An overview on Thermal coal logistics and Port dynamics Page 17 of 26
Kakinada Sea port and Rawa. Kakinada sea port enjoys a 65 per cent share in the total
non-major traffic of the state. Kakinada Anchorage 21 per cent shares in the total traffic
while Rawa handled 13.6 per cent share of the total traffic.
Karnataka
The state has 11 ports in which one is a
major port (New Mangalore).
Iron ore forms a major portion of traffic
handled by the non-major ports
contributing 90 per cent of the total
traffic handled.
Key non-major ports in Karnataka
include the ports of Karwar and
Belekeri. At 6.1 million tones of traffic,
Belekeri port enjoys a 68 per cent share
in the total non-major traffic of the state.
Karwar port handled traffic of 2.7
million tones during the year, thus
having a 30.5 per cent share in the total
traffic.
Tamil Nadu
The state of Tamil Nadu (TN) has got a vast coast line of 1000 kms. The state has 15
ports out of which three are major ports (Ennore, Chennai, and Tuticorin).
POL forms a main portion of traffic
handled by the non-major ports. Its
share in the total traffic has gone down
from 88 per cent in 2002-03 to 80 per
cent in 2007-08. Other traffic and coal
form the remaining key constituents of
traffic of the ports in TN.
Key non major ports in Tamilnadu
include the ports Thirukkadaiyur,
Nagapattinam and PY-3 oil field.
Nagapattinam port enjoys a 37 per
cent share in the total non major traffic
of the state. Thirukkadaiyur port
handled 30.3 per cent share in the total
traffic and PY- 3 oil field handled 18.5
per cent share in the total traffic.
Figure 3.2.4: Ports of Karnataka
Figure 3.2.5: Ports of Tamil Nadu
An overview on Thermal coal logistics and Port dynamics Page 18 of 26
Orissa
The state of Orissa located on the east coast of India has a coast line of 480 kms. The
important minor ports in the state are Gopalpur, Behrabalpur and Dhamra port. State is
well known for its iron ore mines and steel plants.
An overview on Thermal coal logistics and Port dynamics Page 19 of 26
3.3 Key projects coming up at major and Non-major ports:
Table 3.3.1: Upcoming Key projects at Major ports
Key projects for the concern of thermal coal are: deep draft berth in Paradip with a
capacity addition of 10 Mill tones, mechanized coal handling facility at Vizag which will
not only increase the capacity by 3.3 Mill tones but also increase the port efficiency and
decrease vessel turnaround time. Ennore port is coming up with additional coal terminal
with a capacity of 8 mill tones per annum, while Mormugao will build a dedicated coal
terminal with a capacity of 7 MMTPA, presently it is handling coal traffic through its
general cargo berth.
An overview on Thermal coal logistics and Port dynamics Page 20 of 26
Table 3.3.2: Upcoming Key projects at Non major ports
There are also key projects for coal traffic at non major ports coming up. Mundra port is
coming up with a dedicated coal terminal with a capacity of 15 MMTPA. Dholera will
have a capacity addition of 15 mill tones, which will shift some of the traffic from
various ports of Gujarat. Dahej is also coming up with a dry bulk terminal which can
cater to the coal requirement for the plants in or near Dahej.
In Maharashtra also some interesting projects are coming up, one of them is Dighi port,
which is planning to have dedicated coal berth, container terminals and general cargo
berth. It will play a vital role in the coal movement of the upcoming UMPP in
Maharashtra.
Port of Krishnapatnam phase 2 will enhance its coal handling capacity and as the port of
Chennai is discouraging coal traffic due to environmental issues, Krishnapatnam will be
next in line to receive coal traffic along with Ennore, Karaikal and Nagapatinam.
Apart from the above mentioned projects, Dharma and Gopalpur port of Orissa is also
planning to build coal and general cargo terminals respectively.
An overview on Thermal coal logistics and Port dynamics Page 21 of 26
4.0 Changing trend a probable shift in coal traffic:
With a coal-based power generating capacity of about 70% of total installed capacity, the
demand of thermal coal is estimated to be about 415 Mt by 2011/12 (Source: The ministry of
coal). Environmental concerns, logistics hurdles and unavailability of indigenous coal
linkage is leading towards a trend of importing coal. Traffic at Indian port is set to grow
at a CAGR of 9% to 1.16 billion tones in 2013-14. A certain shift in traffic to newer and
more sophisticated ports is eminent considering expected growth in traffic, congestion at
existing ports, cargo handling equipment, draft, logistical distance and cost advantage
that some of the new ports have to offer to the hinterland. The states of Andhra Pradesh,
Orissa and Gujarat are expected to see significant shift in traffic pattern. We
expect the operational ports of Mundra, Gangavaram and Krishnapatnam and the
upcoming ports of Dhamra, Gopalpur, Dholera, Kirtania and Dighi to increasingly
garner higher share of traffic from the existing ports.
Table 4.0.1: Coal traffic trend at Non-major ports
An overview on Thermal coal logistics and Port dynamics Page 22 of 26
Table 4.0.2: Imported coal based plants and probable shift in port traffic
Maharashtra:
Trombay power plant currently sources its coal requirements for the ports of Mumbai
and Dharamtar. Mumbai port does not have a dedicated coal jetty and is working at an
utilisation rate of 121 per cent; hence, we expect the Dharamtar port to handle
incremental coal traffic for the power plant.
Dahanu power plant being located close to the Dahanu port, meets its coal
requirements from this port, hence no shift in traffic is expected.
Khaperkheda TPS is located near Nagpur and it uses ports of Mumbai and
Visakhapatnam for coal import. However, with the port of Gangavaram being setup
(greater draft, dedicated coal berth and very low utilization), the traffic might shift there,
as importing coal to eastern is a rational move if the import is from Indonesia.
Gujarat:
The Sabarmati TPP and Gandhinagar TPP source their imported coal requirements from
Kandla (178% capacity utilization) and Mundra that handle coal from their
multipurpose berth. Ports of Dahej and Dholera plan to setup terminals by 2011 for
handling dry bulk cargo, but currently they don’t offer end rail connectivity. Keeping in
account the congestion at Kandla and the distance advantage these ports
have over the former two, it can safely be presumed that some of the traffic
An overview on Thermal coal logistics and Port dynamics Page 23 of 26
will shift, once the end rail connectivity is in place.
Sikka TPS handles its coal requirements from the port on account of its proximity,
hence no shift is expected.
The Ukai TPS near Surat, handles its coal requirements from the port of Magdalla. With
commissioning of the coal at Hazira in 2012, coal traffic will shift to Hazira port.
Being close to the power plant, the port of Hazira enjoys transportation coat
advantage of Rs 25.7 per tonne.
The Wanakbori TPS is located near the city of Ahmedabad and currently handles its
coal requirements from ports of Magdalla and Bhavnagar. Once coal jett y at
Dholera port gets commenced, coal traffic will shift to the port of Dholera. The
port of Dholera offers a distance and cost advantage (Rs 96.4 per tonne over Magdalla
and Rs 34 per tonne over Bhavnagar) to the location of the power plant.
Adani Power Plant commenced operations previous year and the Tata Power
UMPP is expected to commence operations in 2012-13. Both these power plants are
reliant on 100 per cent coal imports for their power generation. As they are located close
to the Mundra port, a dedicated coal terminal is being set up at Mundra port to handle
coal for the requirements of both these power plants.
Andhra Pradesh:
Being located close to the port of Visakhapatnam, both Ramagundam as well as
Simhadri TPP source their requirements from this port. Only competing port is
Gangavaram, not in terms of logistics or cost advantage, but in efficiency (due
to dedicated coal-handling facility with specialized equipments for faster
handling) hence, there will be a shift in coal traffic only if larger ships need to be
handled or there is a need to handle cargo faster. Currently, the port of Gangavaram
does not have end rail connectivity but is in the process of implementing it.
Tamil Nadu:
The Ennore, Mettur and North Chennai thermal power plants handle their coal
requirements through the Ennore port. Sical Logistics Ltd, which operates the coal
terminal, has entered into an agreement with TNSeB to handle coal at the Ennore
terminal for 20 years. Due to this, coal traffic is not expected to shift to any other
port. Moreover, power plants are located near the port itself. The port’s coal terminal
is currently working at an utilisation rate of 69 per cent.
The Tuticorin TPS, being located close to the Tuticorin port, sources its imported
coal requirements from this port. The coal berth at Tuticorin is operating at an utilisation
rate of 98 per cent. Since there is no other port in the vicinity, this port will continue to
handle coal requirements for this plant.
Orissa:
Talcher TPS (NTPC) is currently meeting its coal requirements through the Paradip
port, which has a dedicated berth for handling coal cargo and is currently operating at a
capacity utilisation of 67 per cent. The port is in the process of setting up a deep
draught coal berth, expected to be operational by 2012. The port also offers a good draft
An overview on Thermal coal logistics and Port dynamics Page 24 of 26
of 12.5 m and can handle Handysize, Handymax as well as Panamax vessels. Hence we
do not expect any shift in traffic to any other port.
Rajasthan:
Suratgarh TPS currently handles its coal requirements from the ports of Kandla and
Mundra. Once the port of Dholera with dry bulk handling capacity comes up (by 2012)
the traffic is expected to shift here. The shift from the port of Kandla will be mainly due
to 178 per cent capacity utilisation at the Kandla port’s general cargo berth, where coal
is being handled. The shift from Mundra port will be due to the distance advantage and
cost advantage of Rs 39 per tonne over Dholera.
West Bengal:
For the power plants located in West Bengal, only the Haldia port handles coal traffic,
which is grossly underutilized (24%). Still there is a possibility for the
traffic to shift to the port of Paradip, as the port of Haldia suffers
from low draft level due to siltation issues.
UP & Bihar:
We expect coal handling for the power plants to shift to the port of Paradip in the
future due to draft issues at Haldia.
An overview on Thermal coal logistics and Port dynamics Page 25 of 26
Exhibits:
Exhibit 1: State wise Thermal Power Plants
An overview on Thermal coal logistics and Port dynamics Page 26 of 26
Exhibit 2: Present & upcoming thermal power plants, coal sources and present & upcoming ports

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Indian Port Dynamics

  • 1. An overview on Thermal coal logistics and Port dynamics Page 1 of 26 An Overview on Thermal Coal Logistics & Changing Port Dynamics in India Presented by: Satya Pal Business Analyst, MD office Sical Logistics Ltd
  • 2. An overview on Thermal coal logistics and Port dynamics Page 2 of 26 Disclaimer: The analysis done is as per the understanding of the author about the industry. Information in this report has been sourced from newspapers, trade journals, white papers, industry portals, government agencies, monitoring industry news and developments, and through access to databases. Analysis methods used include historical trend analysis, judgmental forecasting, and cause and effect analysis. Any facts/numbers if misquoted is purely incidental. The author of the document is just trying to present his own ideas as what the company can consider for the future.
  • 3. An overview on Thermal coal logistics and Port dynamics Page 3 of 26 Executive summary: India, Asia’s 3rd largest economy is fighting all odds to fulfill its promise of supplying power to all by adding 1 lack MW by 2012. While the coal dominates India’s energy basket and will continue to do so, it opens up a huge business potential for a logistics service providers. Demand generators of thermal coal: Unlike the source of coal, which is mainly concentrated in the eastern part of India, the power generating companies are scattered all through out the country. Around 56% of the coal logistics is done by railway, only 5% of indigenous coal is handled through port, but at the same time around 50% of the volume of major ports is contributed by indigenous coal. This shows the inefficiency of major ports in India. But the scenario is changing; with modern ports coming up in BOT basis also the upcoming power plants are being strategically located near ports to use imported coal as a fuel. We will try to anticipate the paradigm shift in this paper. Origin and alternate sourcing of thermal coal: Coal India limited and its subsidiaries are the major producers of coal. 257.754 million Tonnes (provisional) of coal were produced by Coal India Ltd. and its subsidiaries during 2007-08(April-December) Singareni Collieries Company Limited (SCCL) are the main source for supply of coal to the southern region. Though the price of indigenous coal is much cheaper than the imported coal, but the high calorific value and low ash content of imported coal reduces overall logistics cost drastically, making it a feasible and alternate choice. Apart from calorific value, unavailability of railway rakes and coal linkage are the other big issues with power generating companies, dealing with domestic coal for their production. Transportation channels- changing trend: Apart from the quantity issue, untimely delivery of coal has also resulted into stock outs in many thermal plants. In fact the inefficiency in thermal coal logistics is the major cause of concern for the Indian power sector. Railway is the largest logistic provider for delivering coal/coal products to consumption points and there are two main reasons to this- The consumption / supply points are mostly located at long distance from the mine. This essentially requires a solid material handling and bulk distribution system In this research we have captured the present traffic of thermal coal through various ports. Also, in light of increasing thermal coal demand and upcoming key projects in Indian port sector, we have attempted to analyze the probable shift of coal traffic among various ports.
  • 4. An overview on Thermal coal logistics and Port dynamics Page 4 of 26 Executive summary:............................................................................................................ 3 Maps:................................................................................................................................... 5 Tables:................................................................................................................................. 5 1. Demand generators: ........................................................................................................ 6 1.1 Thermal Power Plants- Present and future scenario:................................................ 6 1.2 Thermal Power Plants- State wise: ........................................................................... 8 Maharashtra................................................................................................................. 8 Gujarat......................................................................................................................... 8 Andhra Pradesh........................................................................................................... 8 Tamil Nadu ................................................................................................................. 8 Orissa .......................................................................................................................... 8 Rajasthan..................................................................................................................... 8 West Bengal................................................................................................................ 8 Uttar Pradesh & Bihar................................................................................................. 9 2. Source: .......................................................................................................................... 10 3. Transportation channel: ................................................................................................ 12 3.1 Present port scenario:.............................................................................................. 13 3.2 Port scenario- State wise:........................................................................................ 15 Gujarat....................................................................................................................... 15 Maharashtra............................................................................................................... 15 Andhra Pradesh......................................................................................................... 16 Karnataka.................................................................................................................. 17 Tamil Nadu ............................................................................................................... 17 Orissa ........................................................................................................................ 18 3.3 Key projects coming up at major and Non-major ports:......................................... 19 4.0 Changing trend a probable shift in coal traffic: .......................................................... 21 Maharashtra: ............................................................................................................. 22 Gujarat: ..................................................................................................................... 22 Andhra Pradesh:........................................................................................................ 23 Tamil Nadu: .............................................................................................................. 23 Orissa: ....................................................................................................................... 23 Rajasthan:.................................................................................................................. 24 West Bengal:............................................................................................................. 24 UP & Bihar: .............................................................................................................. 24 Exhibits:............................................................................................................................ 25 Exhibit 1: State wise Thermal Power Plants..................................................................... 25 Exhibit 2: Present & upcoming thermal power plants, coal sources and present & upcoming ports.................................................................................................................. 26
  • 5. An overview on Thermal coal logistics and Port dynamics Page 5 of 26 Maps: Figure 1.1.1: Existing Thermal Power Plants Figure 1.1.2: Upcoming Thermal Power Plants Figure 2.0.1: Source of Indigenous Thermal Coal Figure 3.1.1: Existing Major & Non-major ports Figure 3.2.1: Ports of Gujarat Figure 3.2.2: Ports of Maharashtra Figure 3.2.3: Ports of Andhra Pradesh Figure 3.2.4: Ports of Karnataka Figure 3.2.5: Ports of Tamil Nadu Tables: Table 1.1.1: Upcoming UMPP Table 3.0.1: Major Ports in India & comparison of coal with other commodities Table 3.1.1: State wise coal traffic at Non-major ports Table 3.1.2: State wise summary of Major & Non-major ports Table 3.3.1: Upcoming Key projects at Major ports Table 3.3.2: Upcoming Key projects at Non major ports Table 4.0.1: Coal traffic trend at Non-major ports Table 4.0.2: Imported coal based plants and probable shift in port traffic
  • 6. An overview on Thermal coal logistics and Port dynamics Page 6 of 26 1. Demand generators: 1.1 Thermal Power Plants- Present and future scenario: With around 52% of India’s total power generation currently based on coal, the power sector is the major consumer of the fossil fuel in the country. Absorbing nearly 78% of the total domestic production, coal demand in India is expected to grow rapidly as the country seeks to add 78,000MW of generating capacity during 11th five year plan. At present there are around 130 thermal power plants operational in India and roughly 69 more is expected in next few years. Apart from these there are also plans for the capacity addition and R&M for the existing thermal power plants. As per our desk research based on secondary data and certain assumptions, present demand for thermal coal in India is roughly 484 million tones per annum, while the future additional demand is going to be around 790 million tones per annum, out of which 623 million tones will go to upcoming projects and rest for capacity addition. The Ministry of Power, Govt. of India in association with CEA & PFC has launched an initiative for development of nine coal-based Ultra Mega Power Projects of about 4000 MW capacity. Out of these nine UMPPs, four are proposed to be set up at pit head sites, one each in Madhya Pradesh, Chhattisgarh, Orissa and Jharkhand and five to be set up at coastal sites one each in Gujarat, Karnataka, Maharashtra, Andhra Pradesh and Tamil Nadu. It is proposed to set up pithead projects as integrated Figure 4.1.1: Existing Thermal Power Plants Figure 1.1.2: Upcoming Thermal Power Plants Table 1.1.1: Upcoming UMPP
  • 7. An overview on Thermal coal logistics and Port dynamics Page 7 of 26 with corresponding captive coal mines while for the coastal projects, imported coal shall be used.
  • 8. An overview on Thermal coal logistics and Port dynamics Page 8 of 26 1.2 Thermal Power Plants- State wise: As evident from the Exhibit 1, UP, West Bengal and Maharashtra are the top three states in terms of thermal power generation, where the later two states are coastal state. Thermal power plants are operational in all parts of the country; hence not all the power plants are dependent on imported coal. For the purpose of this report we will limit our discussion only for the power plants which depends upon imported coal. Maharashtra Power plants of Tata Power, Reliance Infrastructure Ltd and MSEB use some amount of imported coal for running their power plants. Ports in the state currently handling coal traffic include Mumbai, Dahanu and Dharamtar. Gujarat There are about five power plants in Gujarat, which rely on some amount of imported coal. They are the Sabarmati TPS, Gandhinagar TPS, Sikka TPS, Ukai TPS and the Wanakbori TPS. Adani Power Station commenced operations in 2009, whereas the Tata UMPP is expected to commence by 2012, both plants are based on imported coal. Andhra Pradesh Ramagundam TPS operated by APGENCO and Simhadri TPS operated by NTPC meet some of their coal requirements through imports. Tamil Nadu The four power plants of Tamil Nadu meet some of their coal requirements through imports. These are the Ennore TPS, Mettur TPS, North Madras TPS and Tuticorin TPS, all operated by TNSEB. Orissa The Talcher TPS (Orissa) operated by NTPC is meeting some of its coal requirements through imports. Currently, Paradip is the only port in the state that is handling coal traffic. Rajasthan RRVVNL operates the Suratgarh TPS. Since the state does not have any operational ports, the power plant sources its requirements from the ports in Gujarat. West Bengal The Farakka TPS is located in the state of West Bengal. Currently, only the Haldia port handles traffic of thermal coal in the state.
  • 9. An overview on Thermal coal logistics and Port dynamics Page 9 of 26 Uttar Pradesh & Bihar The National Capital Power Station and the Kahalgaon TPS located in Uttar Pradesh and Bihar, respectively meet their coal requirements through the port of Haldia.
  • 10. An overview on Thermal coal logistics and Port dynamics Page 10 of 26 2. Source: The major coalfields in India lie on its eastern part, unlike thermal power plants which are spread all across the India. The coal industry is a highly-regulated industry which gives it a monopolistic character. Only government-owned/managed/controlled companies are eligible to mine and trade coal without the restriction of captive consumption. Coal India Limited (CIL) and Singareni Collieries Company Limited (SCCL) account for nearly 92 percent of the total coal produced in the country. The salient features of the Indian coal industry • India is the third largest producer of coal in the world. • Coal is one of the primary sources of energy, accounting for about 67% of the total energy consumption in the country. • India has the fourth largest reserves of coal in the world (approx. 197 billion tonnes.). Figure 5.0.1: Source of Indigenous Thermal Coal
  • 11. An overview on Thermal coal logistics and Port dynamics Page 11 of 26 • Coal deposits in India occur mostly in thick seams and at shallow depths. Non- coking coal reserves aggregate 172.1 billion tonnes (85 per cent) while coking coal reserves are 29.8 billion tonnes (the remaining 15 per cent). • Indian coal has high ash content (15-45%) and low calorific value. • With the present rate of around 0.8 million tons average daily coal extraction in the country, the reserves are likely to last over 100 years. • The energy derived from coal in India is about twice that of energy derived from oil, as against the world, where energy derived from coal is about 30% lower than energy derived from oil. • As of 2003, India has 19 coal washeries (total capacity:27.2 million tonnes per annum) of which 15 are owned by CIL. Power demand in the country touched an all-time high of 99,027 MW recently, a year-on- year growth of over 16%. It is expected that the demand will further soar up to as much as 315,000 MW by 2017 at an average GDP growth rate of 8% per year, which is more than double the demand for power from now. Coal India Limited (CIL) (which have 8 subsidiaries) and Singareni Collieries Company Limited (SCCL) account for nearly 92 percent of the total coal produced in the country. Existing thermal coal demand for power generation in India is around 484 million tones per annum, out of which approximately 22 million tones of thermal coal are being imported yearly. Coal India Ltd (CIL), which currently meets 82% of the power sector’s thermal coal demand, will not be able to keep pace with the power sector’s incremental need because of hurdles in developing new mining projects. So the ministry wants to encourage the power sector to go for larger imports, in 2008-09, India’s total thermal coal imports were 37.92 million tones. Having said so much about indigenous coal supply demand mismatch, there are also an option of importing coal. This trend is catching up in recent past as the quality of the imported coal from Australia, Indonesia or south Africa is much superior that that of domestic coal allocated to the power utilities, which in turn reduces the transportation and handling charges.
  • 12. An overview on Thermal coal logistics and Port dynamics Page 12 of 26 3. Transportation channel: Around 56% of the coal logistics is done by railway, only 5% of indigenous coal is handled through port, but at the same time around 50% of the volume of major ports is contributed by indigenous coal. This shows the inefficiency of major ports in India. Table 3.0.1: Major Ports in India & comparison of coal with other commodities
  • 13. An overview on Thermal coal logistics and Port dynamics Page 13 of 26 3.1 Present port scenario: There are total 12 Major and 187 Non-major ports in India as of now. Capacities of some of the non major ports are better than that of the major ports. States like Maharashtra, Gujarat, Kerala, Andhra Pradesh, Tamil Nadu, Karnataka and Goa are coming up with green field projects in port infrastructure, while existing ports are going ahead with capacity addition. In 2007-08, country handled around 79 million tones of coking and thermal coal at major and non-major ports. Main source of coking coal is Australia, while that of non coking coal is Indonesia. Table 3.1.2: State wise summary of Major & Non-major portsTable 3.1.1: State wise coal traffic at Non-major ports
  • 14. An overview on Thermal coal logistics and Port dynamics Page 14 of 26 Key ports handling coal traffic includes major ports of Paradip, Vizag, Ennore, Tuticorin and non major ports of Bedi, Bhavnagar, Jafrabad, Magdalla, Navlakhi, Mundara, Dahanu and the recently set up ports of Gangavaram and Krishnapatnam. Around 95% of coal is transported through rail from ports and the rest through road. Key factors taken into account while selecting a port for handling coal include nearness to the plant, operating efficiencies at the port, facilities to handle coal at the port and total port charges. Coal is usually transported in panamax and handy max vessels. Some ports have dedicated terminals to handle coal traffic while rest use general cargo berth for the coal, naturally among the power generating companies former one is preferred. Figure 6.1.1: Existing Major & Non-major ports
  • 15. An overview on Thermal coal logistics and Port dynamics Page 15 of 26 3.2 Port scenario- State wise: As shown in the table 3.1.2, Gujarat has the maximum number (21) of operational non-major ports in the country followed by Tamil Nadu and Maharashtra. Although, Maharashtra has the highest number of non-major ports, most of them are not operational. Out of the total traffic handled, nearly 72.5 per cent is handled by ports in Gujarat. Although, setting up of non- major ports in other states has resulted in a marginal decline in the share over the years of total traffic in Gujarat, yet it remains the largest contributor. Gujarat The state of Gujarat has one major port (Kandla) and 41 non-major ports. The state enjoys a strategic location advantage in terms of being the nearest maritime outlet from India to Africa, West Asia, and Europe. Sikka is the largest non-major port in Gujarat, having a share of 41 per cent of the total traffic at 70 million tones. Mundra and Magdalla also feature among the other big non- major ports in the state. In 2007-08, non- major ports in the state of Gujrat handled nearly 71 per cent of the total traffic of non- major ports in the country. The hinterland of Gujarat ports extends up to the northern and central India covering the states of Gujarat, Rajasthan, Haryana, Punjab, Madhya Pradesh, Uttar Pradesh, Jammu & Kashmir and Himachal Pradesh. In 2007-08, the capacity of the non-major ports in Gujarat was 197 million tones, whereas the traffic handled was around 148 million tones, resulting in a capacity utilization of 75 per cent. POL has the largest share of the traffic while coal and general cargo constitutes the other key commodities handled by the non-major ports in the state. Maharashtra There are 53 ports that stretch across the entire length of the coastline. The distant hinterland of the port stretches to far north to Himachal Pradesh, Punjab, Haryana, Rajasthan, Western UP and Delhi; and Madhya Pradesh, and Chhattisgarh to the East. The adjacent hinterland includes the industrial belt of Mumbai, Thane, Roha and parts of Maharashtra. Figure 3.2.1: Ports of Gujarat
  • 16. An overview on Thermal coal logistics and Port dynamics Page 16 of 26 In 2007-08, the non-major ports of Maharashtra handled traffic of 11.61 million tones, an increase of 0.4 per cent over the previous year. Iron ore forms a major portion of traffic handled by the non-major ports while coal and building materials form the other key constituents of traffic of the ports in Maharashtra. The important non-major ports in Maharashtra are the ports of Dharamtar and Ulwa- Belapur. Dharamtar port enjoys a 56 per cent share in the total non-major traffic of the state. Ulwa- Belapur handled traffic of 1.4 million tones during the year, thus having a 12 per cent share in the total traffic. Andhra Pradesh The state of Andhra Pradesh has 13 ports that stretch across the length of the coastline out of which one is a major port (Vizag), the remaining being non-major. The states of Chhattisgarh, Madhya Pradesh, Northern Karnataka, and Western Maharashtra and South eastern Orissa comprise of the key hinterland markets for the ports in this state. In 2007-08 the non-major ports of this state handled around 10 per cent of the total traffic handled by non major ports in the country. POL forms a major portion of traffic handled by the non-major ports. Key non-major ports include the ports of Kakinada Anchorage, Figure 7Figure 3.2.2: Ports of Maharashtra Figure 3.2.3: Ports of Andhra Pradesh
  • 17. An overview on Thermal coal logistics and Port dynamics Page 17 of 26 Kakinada Sea port and Rawa. Kakinada sea port enjoys a 65 per cent share in the total non-major traffic of the state. Kakinada Anchorage 21 per cent shares in the total traffic while Rawa handled 13.6 per cent share of the total traffic. Karnataka The state has 11 ports in which one is a major port (New Mangalore). Iron ore forms a major portion of traffic handled by the non-major ports contributing 90 per cent of the total traffic handled. Key non-major ports in Karnataka include the ports of Karwar and Belekeri. At 6.1 million tones of traffic, Belekeri port enjoys a 68 per cent share in the total non-major traffic of the state. Karwar port handled traffic of 2.7 million tones during the year, thus having a 30.5 per cent share in the total traffic. Tamil Nadu The state of Tamil Nadu (TN) has got a vast coast line of 1000 kms. The state has 15 ports out of which three are major ports (Ennore, Chennai, and Tuticorin). POL forms a main portion of traffic handled by the non-major ports. Its share in the total traffic has gone down from 88 per cent in 2002-03 to 80 per cent in 2007-08. Other traffic and coal form the remaining key constituents of traffic of the ports in TN. Key non major ports in Tamilnadu include the ports Thirukkadaiyur, Nagapattinam and PY-3 oil field. Nagapattinam port enjoys a 37 per cent share in the total non major traffic of the state. Thirukkadaiyur port handled 30.3 per cent share in the total traffic and PY- 3 oil field handled 18.5 per cent share in the total traffic. Figure 3.2.4: Ports of Karnataka Figure 3.2.5: Ports of Tamil Nadu
  • 18. An overview on Thermal coal logistics and Port dynamics Page 18 of 26 Orissa The state of Orissa located on the east coast of India has a coast line of 480 kms. The important minor ports in the state are Gopalpur, Behrabalpur and Dhamra port. State is well known for its iron ore mines and steel plants.
  • 19. An overview on Thermal coal logistics and Port dynamics Page 19 of 26 3.3 Key projects coming up at major and Non-major ports: Table 3.3.1: Upcoming Key projects at Major ports Key projects for the concern of thermal coal are: deep draft berth in Paradip with a capacity addition of 10 Mill tones, mechanized coal handling facility at Vizag which will not only increase the capacity by 3.3 Mill tones but also increase the port efficiency and decrease vessel turnaround time. Ennore port is coming up with additional coal terminal with a capacity of 8 mill tones per annum, while Mormugao will build a dedicated coal terminal with a capacity of 7 MMTPA, presently it is handling coal traffic through its general cargo berth.
  • 20. An overview on Thermal coal logistics and Port dynamics Page 20 of 26 Table 3.3.2: Upcoming Key projects at Non major ports There are also key projects for coal traffic at non major ports coming up. Mundra port is coming up with a dedicated coal terminal with a capacity of 15 MMTPA. Dholera will have a capacity addition of 15 mill tones, which will shift some of the traffic from various ports of Gujarat. Dahej is also coming up with a dry bulk terminal which can cater to the coal requirement for the plants in or near Dahej. In Maharashtra also some interesting projects are coming up, one of them is Dighi port, which is planning to have dedicated coal berth, container terminals and general cargo berth. It will play a vital role in the coal movement of the upcoming UMPP in Maharashtra. Port of Krishnapatnam phase 2 will enhance its coal handling capacity and as the port of Chennai is discouraging coal traffic due to environmental issues, Krishnapatnam will be next in line to receive coal traffic along with Ennore, Karaikal and Nagapatinam. Apart from the above mentioned projects, Dharma and Gopalpur port of Orissa is also planning to build coal and general cargo terminals respectively.
  • 21. An overview on Thermal coal logistics and Port dynamics Page 21 of 26 4.0 Changing trend a probable shift in coal traffic: With a coal-based power generating capacity of about 70% of total installed capacity, the demand of thermal coal is estimated to be about 415 Mt by 2011/12 (Source: The ministry of coal). Environmental concerns, logistics hurdles and unavailability of indigenous coal linkage is leading towards a trend of importing coal. Traffic at Indian port is set to grow at a CAGR of 9% to 1.16 billion tones in 2013-14. A certain shift in traffic to newer and more sophisticated ports is eminent considering expected growth in traffic, congestion at existing ports, cargo handling equipment, draft, logistical distance and cost advantage that some of the new ports have to offer to the hinterland. The states of Andhra Pradesh, Orissa and Gujarat are expected to see significant shift in traffic pattern. We expect the operational ports of Mundra, Gangavaram and Krishnapatnam and the upcoming ports of Dhamra, Gopalpur, Dholera, Kirtania and Dighi to increasingly garner higher share of traffic from the existing ports. Table 4.0.1: Coal traffic trend at Non-major ports
  • 22. An overview on Thermal coal logistics and Port dynamics Page 22 of 26 Table 4.0.2: Imported coal based plants and probable shift in port traffic Maharashtra: Trombay power plant currently sources its coal requirements for the ports of Mumbai and Dharamtar. Mumbai port does not have a dedicated coal jetty and is working at an utilisation rate of 121 per cent; hence, we expect the Dharamtar port to handle incremental coal traffic for the power plant. Dahanu power plant being located close to the Dahanu port, meets its coal requirements from this port, hence no shift in traffic is expected. Khaperkheda TPS is located near Nagpur and it uses ports of Mumbai and Visakhapatnam for coal import. However, with the port of Gangavaram being setup (greater draft, dedicated coal berth and very low utilization), the traffic might shift there, as importing coal to eastern is a rational move if the import is from Indonesia. Gujarat: The Sabarmati TPP and Gandhinagar TPP source their imported coal requirements from Kandla (178% capacity utilization) and Mundra that handle coal from their multipurpose berth. Ports of Dahej and Dholera plan to setup terminals by 2011 for handling dry bulk cargo, but currently they don’t offer end rail connectivity. Keeping in account the congestion at Kandla and the distance advantage these ports have over the former two, it can safely be presumed that some of the traffic
  • 23. An overview on Thermal coal logistics and Port dynamics Page 23 of 26 will shift, once the end rail connectivity is in place. Sikka TPS handles its coal requirements from the port on account of its proximity, hence no shift is expected. The Ukai TPS near Surat, handles its coal requirements from the port of Magdalla. With commissioning of the coal at Hazira in 2012, coal traffic will shift to Hazira port. Being close to the power plant, the port of Hazira enjoys transportation coat advantage of Rs 25.7 per tonne. The Wanakbori TPS is located near the city of Ahmedabad and currently handles its coal requirements from ports of Magdalla and Bhavnagar. Once coal jett y at Dholera port gets commenced, coal traffic will shift to the port of Dholera. The port of Dholera offers a distance and cost advantage (Rs 96.4 per tonne over Magdalla and Rs 34 per tonne over Bhavnagar) to the location of the power plant. Adani Power Plant commenced operations previous year and the Tata Power UMPP is expected to commence operations in 2012-13. Both these power plants are reliant on 100 per cent coal imports for their power generation. As they are located close to the Mundra port, a dedicated coal terminal is being set up at Mundra port to handle coal for the requirements of both these power plants. Andhra Pradesh: Being located close to the port of Visakhapatnam, both Ramagundam as well as Simhadri TPP source their requirements from this port. Only competing port is Gangavaram, not in terms of logistics or cost advantage, but in efficiency (due to dedicated coal-handling facility with specialized equipments for faster handling) hence, there will be a shift in coal traffic only if larger ships need to be handled or there is a need to handle cargo faster. Currently, the port of Gangavaram does not have end rail connectivity but is in the process of implementing it. Tamil Nadu: The Ennore, Mettur and North Chennai thermal power plants handle their coal requirements through the Ennore port. Sical Logistics Ltd, which operates the coal terminal, has entered into an agreement with TNSeB to handle coal at the Ennore terminal for 20 years. Due to this, coal traffic is not expected to shift to any other port. Moreover, power plants are located near the port itself. The port’s coal terminal is currently working at an utilisation rate of 69 per cent. The Tuticorin TPS, being located close to the Tuticorin port, sources its imported coal requirements from this port. The coal berth at Tuticorin is operating at an utilisation rate of 98 per cent. Since there is no other port in the vicinity, this port will continue to handle coal requirements for this plant. Orissa: Talcher TPS (NTPC) is currently meeting its coal requirements through the Paradip port, which has a dedicated berth for handling coal cargo and is currently operating at a capacity utilisation of 67 per cent. The port is in the process of setting up a deep draught coal berth, expected to be operational by 2012. The port also offers a good draft
  • 24. An overview on Thermal coal logistics and Port dynamics Page 24 of 26 of 12.5 m and can handle Handysize, Handymax as well as Panamax vessels. Hence we do not expect any shift in traffic to any other port. Rajasthan: Suratgarh TPS currently handles its coal requirements from the ports of Kandla and Mundra. Once the port of Dholera with dry bulk handling capacity comes up (by 2012) the traffic is expected to shift here. The shift from the port of Kandla will be mainly due to 178 per cent capacity utilisation at the Kandla port’s general cargo berth, where coal is being handled. The shift from Mundra port will be due to the distance advantage and cost advantage of Rs 39 per tonne over Dholera. West Bengal: For the power plants located in West Bengal, only the Haldia port handles coal traffic, which is grossly underutilized (24%). Still there is a possibility for the traffic to shift to the port of Paradip, as the port of Haldia suffers from low draft level due to siltation issues. UP & Bihar: We expect coal handling for the power plants to shift to the port of Paradip in the future due to draft issues at Haldia.
  • 25. An overview on Thermal coal logistics and Port dynamics Page 25 of 26 Exhibits: Exhibit 1: State wise Thermal Power Plants
  • 26. An overview on Thermal coal logistics and Port dynamics Page 26 of 26 Exhibit 2: Present & upcoming thermal power plants, coal sources and present & upcoming ports