Rail Vikas Nigam to hold 10% in new ports infra entity

Government-owned Rail Vikas Nigam Ltd (RVNL) is to take 10 per cent equity in the new public sector unit (PSU) to be formed to enhance port connectivity through the railways.

As already reported in this newspaper, all 12 major port trusts intend to jointly form the proposed company to be called Port Infrastructure Vikas Nigam Ltd (PIVNL). The PSU will be formed with equity stakes from all 12 major ports and RVNL, with a 90:10 shareholding pattern. The initial authorised share capital will be around Rs 100 crore, divided into a million equity shares of Rs 1,000 each.

The company will construct, operate and maintain rail and road infrastructure to facilitate connectivity for transportation of goods from ports in India or abroad. The special purpose vehicle is to be formed within a month of Cabinet approval. A draft note for the Cabinet was sent to, and been examined, by the ministries of finance, railways, law & justice and the Planning Commission.

RVNL is under the railways ministry. It was formed to undertake and implement railway projects. It has so far completed 11 port connectivity projects and has six pending. PIVNL has the specific objective of increasing the efficacy of the rail evacuation systems at major ports. End-to-end connectivity to the hinterland is an important factor in the efficiency and growth of a port. On that front, significant work remains to be done, a ministry official says.

In 2013-14, nearly 28 per cent of the total cargo handled by major ports was transported by Indian Railways, to and from the hinterland. A seven-year-old World Bank study says the optimal share of transporting goods through rail should be at least six percentage points higher. Non-major ports handle 60-90 per cent of their cargo volumes through the rail network.

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Port Infrastructure Vikas Nigam Limited's agenda

• Undertake projects directly or form project-specific special purpose vehicles
   
• Raise financial resources for funding port-related railway projects
   
• Undertake modernisation of rail related infrastructure at major ports
   
• Manage interface with Indian Railways to promote seamless movement of trains to and from ports
   
• Enhance capacity in sections critical for hinterland connectivity