New Delhi/Bhubaneswar, Oct. 11: The government's policy to strengthen railway infrastructure in collaboration with bulk users of freight services in both public and private sectors is gathering steam.
Rail Vikas Nigam, a subsidiary of the Indian Railways, today signed an agreement with nine companies, including Posco Steel and Steel Authority of India Limited (SAIL), for a special purpose vehicle (SPV) to lay a 82-km line at a cost of Rs 598 crore from the Paradip port to Haridaspur which is near the proposed site of the Korean company’s $12-billion steel plant.
In addition to RVNL, SAIL and Posco, the equity partners in the company are Paradip Port Trust, Essel Mining, Rungta Mines, MSPL, Jindal Steel and Power Limited and Infrastructure Development Corporation of Orissa.
The agreement was signed in Bhubaneswar in the presence of chief minister Naveen Patnaik.
The special purpose vehicle has been registered as Haridaspur-Paradip Railway Company (HPRC). Patnaik said 70 per cent of the land for the project has already been acquired and handed over to the East Coast Railway. The project is expected to be completed by March 2008.
The new line will reduce the distance from Paradip to SAIL’s plants in Bokaro, Durgapur and Burnpur, allowing the PSU to save on cost and time in transporting the raw material from the port.
The agreement stipulates that the railways will make available rakes to SAIL to carry coking coal from Paradip to the SAIL plants.
While SAIL will shell out Rs 5 crore for a stake in the SPV, the Korean company will invest Rs 27.5 crore for a 10 per cent share.
Posco said the railway line would not only help its 12-million-tonne steel project but also prove crucial for the entire steel sector in the state. “This will help secure stable and competitive railway transportation route for iron ores between the mines and the plants,” a Posco release added.
Orissa government officials said the new rail link would establish a direct link between the iron-ore rich areas of Keonjhar to Paradip port, shortening the distance by about 335 km compared with the existing route via Kharagpur.
This would make the export of iron ore from India more competitive. The proposed rail line would be a crucial link for transport of raw materials such as iron ore, coal and imported coking coal and finished goods to and from the steel hub at Duburi in Jajpur district where a number of steel projects are proposed to be located. Though the line was sanctioned in 1996-97, work on it has not progressed much due to fund constraints.
Railway officials said the agreement is one among the many that have been lined up to build new lines with PSUs, private companies and state governments as partners.
