Bhubaneswar, July 19: In a move that would allegedly deprive Orissa of crores of rupees in revenue, the Union railway ministry has handed over the Daitari-Banspani railway line expansion project to South Eastern Railway. The East Coast Railway, headquartered in Bhubaneswar, was in charge of the project before the ministry issued the order.

The order to shift the financial and administrative control from ECoR to SER seems to have been taken just days after railway minister Laloo Prasad Yadav presented his budget claiming that he has taken care of Orissa’s interests. With this order, Orissa is likely lose nearly Rs 1,000 crore annually.

Senior railway officials said the railway ministry has sent a letter dated July 12 to ECoR communicating its decision to shift the project’s administrative control to Calcutta-based South Eastern Railway (SER).

The construction division the railways was implementing the project from the ECor office in Bhubaneswar after it began operations in April 2003.

The construction division looks after projects under ECoR, SER as well as Eastern Railway.

The Daitari-Banspani railway link may not have been a significant project for the railway ministry but the economic prosperity of Orissa rests heavily on its early completion.

The state has about 26 per cent of the country’s iron ore reserves. It has a coastline, which is more than 480 km long and is also rich in minerals.

The estimated cost of the project, which began in the late 80s, was Rs 590 crore of which Rs 450 crore has already been spent. Once completed, the 155-km-long Daitari-Banspani line would have earned Orissa crores of rupees as it would have helped transport the mineral resources from the state’s northern interiors.

The line would have connected the Banspani mining area in Keonjhar district to Daitari in Jajpur district.

A major hurdle faced by industrialists planning to set up iron ore-based plants in the state is the absence of a train link from Keonjhar and Sundargarh — the two districts possessing an abundance of iron ore — to the port area.

The Gandhamardan-Malangtoli mines, famous for their iron ore reserves, would have been connected to Paradip port and the steel plants located at Nayagarh, Daitari and Gopalpur.

Orissa has 90 per cent of India’s chrome ore and nickel reserves; 70 percent of bauxite; and 24 percent of coal reserves.

The railway ministry has not stated any reason for withdrawing a significant project like this from the EcoR’s control. An official said the Daitari-Banspani line would substantially reduce the cost of transportation of iron ore from the mines to Paradip port vis-à-vis Haldia. Once it becomes fully operational, Haldia may no longer be the preferred place for ore exports. Despite possessing the raw material required to become a major steel producer, Orissa’s economic development hasn’t really gathered momentum due to problems pertaining to infrastructure.