Title - Cash-strapped Railways gets major investment boost for naxal belts

The Railways has got a major boost with big energy sector players set to invest Rs 5,000 crore in three proposed corridors in the highly sensitive Naxal belts having rich coal blocks in Chhattisgarh.


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The power crisis has brought the big energy sector players to the Railways' doors with the three corridors falling within the resource rich coal blocks in Bilaspur, Korba, Raipur and Ambikapur. As many as 22 companies are interested to tap an estimated power generation potential of 50,000 megawatt in the region.
Mostly, the coal blocks are untapped and located in remote areas where transportation is a major handicap. A memorandum of understanding (MoU) was signed between the Railways and the Chhattisgarh government on February 27 to develop the three corridors. The 180-km East Corridor will run between Bhudevpur, Gharghoda and Dharamjaygarh up to Kora connecting it with coal mines in Gare-Pelma blocks. The 150-km North Corridor will connect Parsa to Surajpur and extend further to Korba via Katghora.


The 122-km East-West Corridor will run between Gevra Road and Pendra Road via Dipka, Katghora, Sindurgarh and Pasan connecting mostly mines and mineral resources belts near Bilaspur. Sensing the urgency to connect these untapped coal blocks with main railway corridors running between Howrah and Mumbai via Jharkhand, the 22 private players and government entities of power and energy sectors are at the doors of the rail ministry and the Chhattisgarh government within three months of signing of the MoU. BALCO, SECL (a subsidiary of Coal India Limited), Jindal Steel and Power Limited, Tamil Nadu Electricity Board, Goa Electrical Corporation, AES CG Energy Private Ltd, SKS Ispat, Prakash Industries, Fatehpur East Coast Private Ltd (a consortium of five companies), DB Power, CMDC, Sarda Energy, Monet Ispat Ltd and Neco Jaisawal are among some of the 22 companies eyeing the coal blocks.
A senior Railway Board official said, "We are encouraged by the response and the pace of proposals as we already had conducted two meetings, one between the power ministry and state and other between the Railways and prospective investors." The investors have clearly hinted about pumping in the required money to construct these corridors, which would take at least five years, even if the project starts now. The compulsion is the underutilised coal blocks and the facilitating link could be Railways, which is cash-starved and looking for investments to keep operations running in these hard terrains.

The Railways is planning a special purpose vehicle (SPV) through a shareholder agreement between Rail Vikas Nigam Ltd (RVNL), the Chhattisgarh government and prospective partners. "The concession agreement will give the right to the SPV to construct, maintain and transfer the line to the Railways after a concession period of 30 years. Train operation and freight collection will be done by the Railways, but the appropriated earnings will be given to the SPV," said the official adding, "Consultations with the Chhattisgarh and prospective partners have begun." The shortage of coal is keeping major power plants on tenterhook.