Despite its cash-flow issues, Coal India Ltd has already spent over Rs 8,000 crore as capital expenditure (capex) till December 2020 in the current fiscal, and is looking to meet a revised target of Rs 13,000 crore of such expense by the end of FY'21, an official said on Sunday.
The capital expenditure target for the financial year 2020-21 was initially set at Rs 10,000 crore, the CIL official said.
The government has instructed the public sector companies to increase their capital expenses to boost the economy which was hit by the COVID-19 pandemic, he said.
"With the achievements of our internal goals, the government has raised our capital expenditure target to Rs 13,000 crore.
"We have already crossed Rs 8,000 crore till December and will definitely surpass the Rs 10,000-crore mark. We will chase the new goal as this will help revive the economy," a CIL official said.
The Maharatna PSU had spent Rs 5,023 crore till September this fiscal, which was 118 per cent utilisation of its half-yearly target.
The spending was made for procuring heavy earth-moving machinery, setting up railway lines, development of sidings, exploration works and investments in joint ventures.
The major challenge for Coal India for accelerating capital expenditure has been the cash-flow issues, the official said.
Moreover, there has been a sluggish coal demand with over 50 million tonne stock at pitheads and 37 million tonne at thermal power stations, the industry sources.
"As against a stock requirement of 21 days, the power plants have coal for running units for 23-24 days. How will they buy additional coal?" they said.
In order to push its sales, the miner may have to rationalise prices of coal meant to substitute imported dry fuel.
Coal India was aiming at substituting imported dry fuel of 80-85 million tonne with more domestic supplies in the current fiscal.