CEWRL signs pact with SBI-led consortium for funding rail line project to evacuate coal

Chhattisgarh East West Rail Ltd (CEWRL) has entered into a pact with a consortium of banks led by State Bank of India for a sanctioned loan of Rs 3,976 crore to develop a 135-km double rail line for coal evacuation.

CEWRL is a joint venture company formed by Coal India arm South Eastern Coalfields Ltd (SECL), IRCON and the Chhattisgarh government.

"A common loan agreement was signed between Chhattisgarh East West Rail Ltd... and consortium of banks led by State Bank of India for a sanctioned loan of Rs 3,976 crore for development of a 135 KM double rail line to help evacuate coal from SECL mines," according to a Coal India official.

The loan will be utilised by CEWRL for a 135-km double line connectivity from Gevra Road to Pendra Road (both existing stations) to evacuate coal from Gevra, Dipka and Kusmunda -- the mega mines of SECL.

"The project has been designed with a debt to equity ratio of 80:20 wherein the promoters are required to contribute about 994 crore and the balance amount of Rs 3,976 crore is arranged from banks as rupee term loan," the official said.

With the promoters investing more than Rs 650 crore in the project and land acquisition and forest clearance already obtained for the main line of the project, the project is now expected to be completed by March 2023.

When completed, it will help SECL evacuate about 65 million tonnes (MT) of coal every year from its mines.

Coal India eyeing one billion tonnes of output target amid slump in fuel demand in the wake of lockdown.

East-West Rail Corridor Project with an estimated cost of Rs 4,970 crore is a 135-km double line electrified railway project from Gevra Road to Pendra Road as a shorter and alternate route to the existing highly congested available rail system for movement of coal traffic towards northern and western part of the country.

"The project also includes connectivity to the Gevra, Kusmunda and Dipika Mines of SECL which are slated for massive enhancement in coal production," the official said.

SECL has a 64 per cent holding in CEWRL; IRCON, a Ministry of Railways PSU, holds 26 per cent stake; and the rest 10 per cent of the stake is held by State Industrial Development Corporation, the Government of Chhattisgarh.

State Bank of India is the lead bank with Rs 1,800 crore exposure to this infrastructure project and the rest of the exposure is amongst Punjab National Bank, Union Bank of India, Canara Bank, Indian Bank and Bank of Baroda.

Coal india accounts for over 80 per cent of domestic coal output.