Sail wants security to be included in Chhattisgarh rail line cost

Cost of rail line security should be included in overall project cost by Railways, which will be about Rs 250-400 crore

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Country’s largest steel maker Sail has asked the Indian Railways to include upto Rs 400 crore towards the security of proposed rail line between Rowghat and Jagdalpur in the project cost. Sail is in the process of developing a mine in naxal-hit area of Rowghat, Chhattisgarh, which will produce iron ore of about 7 million tonne in the next two years.

The cost of the rail line security should be included in the overall project cost by the Railways, which will be about Rs 250-400 crore, Sail informed ministry of steel recently. Subsequently, the ministry asked the rail ministry to look into the demands of Sail for an expeditious decision, according to a senior government official.

The project cost is about Rs 3,500 crore. The company is also in the process of appointing a mine developer and operator (MDO) for Rowghat. It has over 500 million tonnes of iron ore reserves, CS Verma, chairman and managing director, Sail, had said last month. Verma is also the chairman and managing director of NMDC.

A memorandum of understanding was signed by Sail, NMDC, the ministry of railways and the Chhattisgarh government in 2007 to build the 235 km new broad gauge railway line from DalliRajhara to Jagdalpur via Rowghat in Chhattisgarh, according to a government statement.

The rail line was to be constructed in two phases. Sail was expected to bear the entire cost for the first phase, 95 km from DalliRajhara to Rowghat, while second phase, 140 km from Rowghat to Jagdalpur, would be shared by Indian Railways, Sail, Chhattisgarh government and NMDC. The project cost was estimated to be around Rs 1,000 crore according to calculations done in 2004-05, according to the statement issued that time.

Sail has already got home ministry's approval to deploy five battalions of paramilitary forces for Rowghat for five years and is currently building barracks for them. The entire security cost will be borne by the company.

The company had received environment and forest clearances in 2009 for developing the mines but no forward movement was done because of naxalite activities in the area.

The Rowghat mines are crucial for iron ore needs for its largest steel plant at Bhilai. Currently, Bhilai’s sources iron ore from Dalli-Rajhara mines, but it is fast depleting. Sail is raising its production capacity at Bhilai s a part of its Rs 72,000 crore capacity expansion plan.The steel plant had planned to increase production capacity to 7 million tonnes per annum by March 2013 from 5 million tonnes per year in 2012.

The area surrounding the mines has been impacted by naxalite activities. About 2,000 hectares of area in Kanker and Narayanpur districts, strongholds of naxalites, have got necessary clearances but because of security concerns, the work could not be started.