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Hyderabad-based energy and infrastructure group GVK today said its proposed arrangement with Australia's largest rail freight operator Aurizon on the joint development of a rail line and a new coal terminal to unlock the Galilee Basin coal resources in that country have reached a significant milestone.
The two companies announced a partnership in March this year under which Aurizon would acquire 51% stake in Hancock Coal Infrastructure Pty Limited(HCL), which owns GVK Hancock's rail and port projects. The proposed arrangement is intend to provide sufficient equity and debt funding for the projects to reach financial closure.
"The parties have made further progress over the last few months and have reached alignment on a rail solution and on the commercial terms for the proposed transaction such as governance, timing of milestones, funding and conditions for completion," the company said in a statement.
The Indian company had proposed to make a massive $ 10 billion investment to develop Hancock coal mines, which it had acquired in 2011, along with rail transport corridor and port infrastructure. Of this the development of rail line and port facilities alone cost around $ 6 billion.
Whilst the proposal remains non-binding and with further diligence to be undertaken, the parties are aligned on the key aspects of the proposal, with drafting of definitive legal documents now being undertaken, the company further said.
Under the proposal about 300 km-500 km of new rail corridor and track would be developed in the initial stage, which would be built to narrow-gauge specification to carry trains of up to 25,000 tonnes, with the option to consider an expansion to a full greenfield line (narro or standard gauge) depending on the increased tonnage, according to a press release.
