Coal India Ltd plans to form joint ventures with the Indian Railways and private companies for rail projects that can generate revenue from third parties that use the facilities. The company is looking at revenue based partnerships to ramp up some 50 projects that can ease the congestion in coal movement in the country.
Most railways projects are initially financed by Coal India, which is later compensated by the government. Coal India is looking at models such as funding railway projects linking mines to coal users or creating a special purpose vehicle like the Krishnapatnam Rail Company. The Krishnapatnam Rail Company is a venture between the Andhra Pradesh government, Krishnapatnam Port Co and Rail Vikas Nigam. The company was set up to build and provide rail links to the port and has become a profitable venture.
One option being considered involves handing over the responsibility of building the infrastructure to the railways with funding by Coal India. In return, Coal India will be offered freight discounts on the coal carried to customers, a senior coal sector official said.
In return, Coal India will be offered freight discounts on the coal carried to customers, the official said. Another model proposed is the formation of joint ventures that will collect freight from all users.