Paradip rail link set to happen
KENDRAPARA, March 9. The all-important Paradip-Haridaspur rail
line, derailed for nearly a decade after delayed land acquisition and
poor allocation from the Union rail budget, is finally being readied
through PSU and private equity share holding participation.
In the backdrop of a string of steel projects coming up in the Duburi
area, the proposed 78-km broad gauge railway line is being viewed as
a "communication lifeline" for the Paradip port.
The project, when complete, will restore rail connectivity for the
Paradip port with the mineral-rich hinterland in Orissa's Jajpur and
It would also go a long way in easing the traffic burden on the
existing Paradip-Daitary expressway being widened by the National
Highway Authority of India.
Officials claimed that project construction is likely to commence
this month, with equity holding of public sectors and industrial
The Union government has so far allocated an estimated Rs 50 crore
for the project conceived in 1996. The allocated amount met the
required sum for land acquisition for the broad-gauge line.
With budgetary provisions (little more than Rs 3 crore) being too
little, the often-raised Central neglect theory has gained ground and
there is doubt whether the project will see light of day. With the
state going on a steel MoU-signing spree, the need for early
completion of this vital rail project was felt all the more. This
apparently prompted the rail ministry to invite private participation
in terms of equity share holding, said an officer of East Coast
The projected cost is pegged at at least Rs 350 crore and the rail
budgetary allocation would have taken years for the rail line to
become operational. That's why public sectors and private
entrepreneurs were taken into confidence to invest equity shares in
the project as the likely traffic return from the rail project has
gone up by 22 per cent.
Under the aegis of the Rail Vikas Nigam Limited, a Central government
undertaking, a special purpose vehicle (SPV) has been constituted to
expedite completion of the BG rail link, East Coast Railways
The SPV is a registered as a company with an equity base of Rs 180
crore and a capital cost of Rs 390 crore. The deadline for the rail
line to become operational is now 2008, they said.
The break-up of the equity holding pattern will be as follows: Rail
Vikas Nigam-30 per cent, Government of Orissa - one per cent, Paradip
Port Trust -10 per cent, Rungta Mines Limited-24 per cent, ESSEL
Mining and Industries Limited-24 per cent and Jindal Steel and Power
Limited-11 per cent.
Prior to the floating of SPV, the Rail Vikas Nigam Limited had
conducted a traffic appraisal study on the proposed BG rail link and
the rate of returns from this project has increased by 22 per cent,
as per the study's findings.
The traffic appraisal study had been conducted before the state
government had signed steel project MoUs.
So the rate of return will be much higher by the time the rail link
starts operating in 2008.
More than 70 per cent of the required land has been acquired as the
land acquisition drive that hardly moved for years has picked up
momentum over the past six months.
Of the 76 villages coming under the rail project in Jajpur and
Kendrapara, compensation has been disbursed to oustees in 63 villages
in accordance with the Orissa Land Acquisition Act.
Land acquisition in 10 revenue villages of Jagatsinghpur had to be
delayed as there was alteration of rail route passing through these
East Coast Railways officials maintained that work on rail river
bridges are planned to begin this month. Land acquisition is expected
to be completed by the end of the current year.