Sagarmala Development Company to infuse Rs 125 cr in KRCL

Sagarmala Development Company (SDCL) has decided to infuse Rs 125 crore in special purpose vehicle KRCL, formed to provide rail connectivity between Krishnapatnam Port and Obulavaripalle in Andhra Pradesh.

Krishnapatnam Railway Company Ltd (KRCL) is a joint venture (JV) of Ministry of Railways, in which Rail Vikas Nigam (RVNL) has equity contribution.

SDCL is a company formed under the government's ambitious Rs 14 lakh crore Sagarmala initiative for identifying port-led development projects and provide equity support for the SPVs.

"The in-principle approval of the Board of Directors be and is hereby accorded for infusion of up to Rs 125 crore in the form of equity in Krishnapatnam Rail Company Ltd pending completion of further financial and legal due diligence," the SDCL Board has resolved.

The total cost of the rail connectivity project between Krihsnapatnam Port and Obulavaripalle is estimated to be at Rs 2,198.50 crore, of which Rs 1,458.9 crore will be met through debt, as per the financial information memorandum by SBI Capital Markets, which was roped in for the equity investment.

"The existing equity in the project is Rs 270 crore with additional Rs 125 crore envisaged to be infused by SDCL, Rs 187.5 crore of the equity requirement to be met by existing shareholders or by RVNL and the remaining Rs 159.1 crore through internal accruals," as per a related document.

The existing shareholding pattern of KRCL includes 30 per cent equity by RVNL and KPCL each, 12.96 per cent by Andhra Pradesh Government, 14.82 per cent by NMDC and 12.22 per cent by Brahmani Industries.

When contacted, Shipping Secretary, Gopal Krishna told PTI that some more projects have been identified for potential equity funding and financing of DPR (detailed project report) by SDCL.

The secretary said these include phase II of the rail connectivity project to Krishnapatnam Port, between Venkatachalam and Obulavaripalle, which has been estimated at a cost of Rs 1,850 crore.

The other projects include CONCOR-MMLP project at Odisha with an estimated cost of Rs 120 crore.

As part of the efforts to promote port-led development in the country, the Sagarmala Development Company (SDC) had been incorporated under the Companies Act and it will have an initial authorised share capital of Rs 1,000 crore and a subscribed share capital of Rs 90 crore.

The Cabinet in 2016 had approved the formation of the SDC under the administrative control of the Ministry of Shipping.