CIL furthers capex to Rs 13k crore, become topmost spenders among PSUs

Coal India (CIL) becomes the topmost spenders among the PSUs furthering its capex for FY21 to Rs 13,000 crore, up 30%, from its earlier Rs 10,000 crore for the fiscal. This has been done going by the government’s direction to the Central PSUs to step up capital expenditures for stimulating economic activities.

Of the additional Rs 3,000 crore injected into CIL’s capex, South Eastern Coalfields, CIL’s largest subsidiary, accounts for Rs  800 crore. This is followed by Rs 585 crores for the CIL headquarters, with Rs 550 crore for the Mahanadi Coalfields and Rs 460 crores for the Central Coalfields.

The enhanced part of the capex would be mainly used to acquire land, procure heavy earthmoving machinery, upgrade rail evacuation infrastructure and develop mines.

The company has been maintaining a steady growth in its capital expenditure since the beginning of the fiscal posting a whopping 166% growth at Rs 7,801 crores during the first nine months of the fiscal compared to Rs 2,930 crores worth of capital expenditure it made during the same period last fiscal.

CIL has already utilised 78% of its total original capex (Rs 10,000 crore) during April-December going beyond the ministry’ target of achieving Rs 7,500 crore capex within that period. But with the capex currently standing at Rs 13,000 crore, CIL’s capex utilisation has been to the tune of 60%.

The company’s capex for the third quarter of the current fiscal at Rs 2,778 crore, posted a strong 90% growth against Rs 1,463 crore during the same quarter last fiscal. During the second quarter, the capex logged a robust 312% growth and 86.5% growth during the first quarter of the fiscal.

CIL’s land possession and civil construction jobs, among other activities, were hamstrung during the Covid-19 led slowdown. But the company could make headway after the situation started improving post unlock. This nudged an increase in capital expenditure, a CIL official said adding the company would be closely monitoring the progress of the capital expenditure to achieve the revised target of Rs 13,000 crore.