SAIL lends helping hand to Railways

Steel major proposes to invest Rs 8,000 crore for eastern freight corridor.

Indian Railways’ ambitious Eastern Dedicated Freight Corridor, facing financial and time constraints, has got a shot in arm as Steel Authority of India Ltd (SAIL) has come up with an offer to bring Rs 8000 crore of investment for the project.

The SAIL today gave a detailed presentation on this proposal to the Railway Board. The Railways have set up a committee to explore the ways in which SAIL can participate in railway projects.

Earlier, in a letter to Railway Minister Mamata Banerjee SAIL has proposed that it can bring this investment for the Sonnagar-Dankuni stretch on the eastern arm. Initial estimates of the Dedicated Freight Corridor Corporation of India Ltd (DFCCIL) indicate around Rs 8500 crore would be required for completing this segment.

Banerjee told reporters, “I see this as a major development as it can take care of a major part of the finances required for the Sonnagar-Dankuni stretch.”

SAIL has also indicated in the letter that it wants to get the laying and building contract of the steel-made railway tracks for this stretch.

The cost of DFCs, one of the most ambitious infrastructure projects, has already has escalated from Rs 28,181 crore to Rs 42,311 crore for the two corridors, excluding the Sonnagar-Dankuni stretch on the eastern arm.

The Railways had already signed a loan agreement for Rs 17,700 crore with Japan International Cooperation Agency (JICA) to fund the 920 km stretch between Rewari and Vadodara. Another Rs 10,000 crore is expected from the World Bank to construct 730 km between Khurja and Mughalsarai.

As the other parts of the project faced fund crunch and the Railways didn’t find its own resource to spend on the freight tracks, Banerjee had mooted the idea of following the Public Private Participation (PPP) mode in these areas.