Date:05/07/2005 URL: http://www.thehindubusinessline.com/2005/07/05/stories/2005070502650700.htm

Back Rail Vikas Nigam finalises Krishnapatnam project plans — Awaits Railway Board's green signal

Mamuni Das

This port is being developed in a phased manner into an all-weather port.

New Delhi , July 4

RAIL Vikas Nigam Ltd (RVNL) has finalised its plans for the Krishnapatnam port connectivity project.

The total cost of the project that would connect Krishnapatnam port with a rail link is estimated to be Rs 591 crore.

RVNL has recently sent the project proposal to the Railway Board and is awaiting a final clearance.

"The equity would be worth about Rs 300 crore and the rest would be debt," a top RVNL official told Business Line.

The equity would be held by RVNL, Krishnapatnam Port Company, Andhra Pradesh Government and some exporters.

"As per the present proposal, 30 per cent of the equity would be held by RVNL, Krishnapatnam Port Company would hold 30 per cent, Andhra Pradesh Government would own 13 per cent and 27 per cent would be held by exporters," the official said.

The project envisages construction of a 114-kilometre railway link between Krishnapatnam port and Obulavaripalle.

As for the debt portion of the project, RVNL officials said that they would raise the debt after getting the project sanctioned from the Railway Board.

Krishnapatnam Port Company Ltd is a private company that is developing the Krishnapatnam port, an existing minor port in Nellore district of Andhra Pradesh.

The company is developing this port into a modern, deepwater port, on a build, own, share and transfer basis.

This port is being developed in a phased manner into an all-weather port, capable of handling large volumes of cargo such as ores, coal, minerals, cement, fertiliser and foodgrains.

RVNL is a special purpose vehicle (SPV) that develops, mobilises resources and implements bankable port connectivity projects. Recently, RVNL had also kicked off the Haridaspur-Paradip broad gauge 82-km long rail link project in Orissa.

An SPV, registered as a company with equity base of Rs 180 crore and a landed cost of Rs 442 crore (with the balance amount being funded through non-recourse debt), was formed to expedite the port connectivity project. RVNL's partners in this project include Orissa Government, Paradip Port Trust, Rugta Mines, Essel Mining & Industries and Jindal Steel & Power.