The Rail Coal Corridor

The Rail Coal Corridor The iconic trouper Amitabh Bachchan with smouldering eyes shot some memorable scenes in the coal mines of Dhanbad and Asansol, essaying the role of Vijay in Kala Pathar which sent audiences into a tizzy. Several years down the line, on 12th of October 2019, members of the Special Purpose Vehicle (SPV) family of the Chhattisgarh East Railway Ltd (CERL) had their chutzpah moment when the first rake loaded with coal was flagged off from Korichappar to a NTPC plant in Bhilai. Scope of the Rail Corridor A Memorandum of Understanding (MoU) was inked between the Ministry of Railways and the Govt of Chhattisgarh (GoCG) on 27th Feb, 2012 for the formation of rail corridors in the state. Three partners, that is South Eastern Coal Fields Ltd (SECL, 64% equity), IRCON (26% equity) and Chhattisgarh State Industrial Development Corporation Ltd (CSIDC, 10% equity) under the PPP model of 2102 as envisaged by the Indian Railways, joined hands in a challenging task of constructing an exclusive rail corridor (the first of its kind in the country) to transport coal to serve the energy needs of the country. As a corollary to synchronize the efforts in developing the rail network, SECL entered into a separate MoU on 3rd Nov, 2012 with IRCON International Limited (IRCON) and GoCG. Project specific SPVs were created for the East Corridor and the East-West Corridor through twin companies, Chhattisgarh East Railway Ltd (CERL) and Chhattisgarh East West Railway Ltd (CEWRL). The debt-equity ratio of all the phases of the project is 80/20. CERL Phase I stretching 132 kms from Kharsia to Dharamajaigarh was scheduled to be fully operational in September 2019, but is now anticipated to be completed by December 2023. The sanctioned cost of the project was Rs 3055crores of which the expenditure has been Rs 2949.23crores (with a physical and financial progress of 96.53% each). Indian Bank and a consortium of lenders are providing the debt. The second leg of this significant Gati Shakti project is CERL Phase II - linking Dharamjaigarh to Urga, with a rail length of 62.5kms. The SPV has executed the financial closure with Central Bank of India, the sole funder on 28th August, 2023 which is a milestone, so that the executing agency IRCON can complete the work by March 2025 as scheduled. The sanctioned cost of the project is Rs 1686.22 crores. Physical and financial progress have been 10.94% thus far which should now gather steam. The last leg (CEWRL) stretches from Gewra Road to Pendra Road (a length of 135kms) which was scheduled to be commissioned by March 2023, but is now anticipated to be completed by December 2024. The project is worth Rs 4970crores, of which an expenditure of Rs 1877.04 crores has taken place. State Bank of India and its consortium is funding the project of which 50.5% physical, with 48% financial progress has occurred. Challenges Along the Way This primary objective of development of infrastructure and loading of coal has suffered on account of cost overruns, delays and change in scope of work. We have been able to construct 102kms thus far and since October 2019, have been able to despatch around 4500 rakes of coal. The work between Gharghoda and Bhalamuda and then onto Gare Pelma (on CERL I) has been pushed behind on account of rerouting due to encroachments by local inhabitants something which was not anticipated. This has led to arbitration cases. We await the verdict for work to resume. The alignment encroached upon the parcels of land of MAHGENCO, and also needed shifting of EHT and LT wires by the Power Grid Corporation. CERL Phase II has also been affected by issues of tackling forest lands and construction of elephant over pass and underpass. The fresh policy of Indian Railways to increase traction capacity from 1x25 to 2x25 wattage would lead to cost escalation in the future. Meanwhile as the construction was in progress, the SPV faced an unusual problem as the railway line encountered a segment of land which was claimed by the NHAI to belong to them. This also led to a change in scope of the work even though the project was conceived prior to the area being claimed by NHAI. CEWRL which would be major bread earner, has encountered several impediments. These include number of elephant passes, the new electrification policy of 2x25 wattage and encroachments in Korba area. The residents are demanding exorbitant rates for relocation and have approached Hon’ble High Court. This has become a road block in execution of the work. Once the complete infrastructure is created it would enable the SPV to transport 150 MT of coal and other minerals to propel economic growth of the area. Simultaneously coal companies like SECL, MAHGENCO and other private players would enable Coal India Ltd to fulfil its onerous responsibility to produce 1 billion tonnes of coal from coal mines like Gare Pelma, Chaal, Baroud, Durgapur, Dipika, Junnadih and Gewra (soon to become the largest coal field in Asia this year). RAPID LOADING SYSTEM AT BAROUD GEWRA CAOL MINES Yet another positive externality of the joint venture is to obviate 54kms of transportation by not having to run freight trains on the dense Howrah-Mumbai route (which is already running more than 110 freight and passenger services). The corridor, quite like the EDFC and WDFC will save fuel costs and improve mobility. The project deadline has been burst, but members of the SPV are gung-ho as we see the end of the tunnel and strive to transport coal to fulfil energy demands of the country. CAOL RAKE DESPATCHED FROM BAROUD “In the midst of chaos, there is also opportunity,” wrote Sun Tzu and we in the SPV are working towards that objective.