OMC may finance land buying for common coal corridor

The state owned Odisha Mining Corporation (OMC), sitting on a cash surplus of over Rs 5,000 crore, is likely to finance land acquisition cost for the Rs 8,000-crore common coal corridor project proposed in the Angul-Chhendipada-Talcher belt.

The Odisha Industrial Infrastructure Development Corporation (Idco) that will implement the project may avail an inter-corporate loan from OMC to meet land buying cost. A total of 6,200 acres is to be acquired for the project, the total cost of which has been worked out to be Rs 1,240 crore.

Land acquisition proposal for the Jharpada-Tentuloi portion of the corridor has been prepared and acquisition cost of this portion has been assessed at Rs 150 crore.

A special purpose vehicle called Brahmani Railways, a wholly owned subsidiary of Idco, has been formed with a share capital of Rs 10 crore, to implement the project.

"On behalf of the SPV, Idco may communicate to OMC regarding the fund requirement in the current year for land acquisition and terms of lending. Subject to government approval, OMC and Idco may mutually finalise the terms of such lending," Pramod K Panda, additional secretary (steel & mines) wrote to industries secretary Parag Gupta. The CMDs of Idco and OMC could not be reached for comments.

The steel & mines department has suggested that SBI Caps, a wholly owned subsidiary of State Bank of India (SBI) may be engaged as a consultant for financial structuring of the project. Idco will prepare the draft Terms of Reference (TOR) for the consultancy services. Since the detailed project report (DPR) has been prepared by Rail India Technical Services Ltd (Rites), it would provide all required inputs pertaining to project cost to the appointed consultant.

The common corridor will support 10 blocks operating in the Talcher coalfields under the command area of Mahanadi Coalfields Ltd (MCL). It is expected to handle coal traffic in excess of 100 million tonne every year. The proposed corridor will be connected to rail heads at three locations- Jharpada, Angul and Budhapanka. The common corridor will have multiple entry and exit points and no surface crossing. Besides, flyovers have also been proposed to avoid cross movements at junction stations.

It may be noted a number of power and steel companies, which have been allotted coal blocks in the area, are facing resistance with regard to land acquisition for construction of private railway sidings. The construction of a common corridor is expected to overcome the problem.