Singareni, RVNL to jointly develop Sattupally rail line

To float SPV for Rs 130cr project

State-owned Singareni Collieries Company Limited (SCCL) is in talks with Rail Vikas Nigam Limited (RVNL) to jointly develop a 36-km railway line between Bhadrachalam and Sattupally in Khammam district.

Expected to cost around Rs 130 crore, the proposed railway line is meant to connect the new Sattupally opencast mines, which are expected to produce 5 million tonnes of coal annually from 2008.

"Discussions with RVNL for the proposed railway line are at an advanced stage. We are also thinking of inviting other players like APGenco to join the special purpose vehicle (SPV) that would be formed to execute the project," T R K Rao, executive director of SCCL, told Business Standard on Tuesday.

According to him, the survey conducted by the South Central Railways on the Bhadrachalam-Sattupally line has estimated 27 per cent rate of return on the project.

SCCL wants this new railway line to be ready by 2008 coinciding with the completion of the Rayalaseema Thermal Power Project (RTPP) stage-2 unit at Muddanur in Kadapa district for which the required coal will be supplied from Sattupally opencast projects (OCPs).

At the rate of 5 million tonnes of production a year, the coal reserves in Sattupally mines are expected to last for about 30 years. The development of Sattupally OCP-1 has been taken up at a cost of Rs 91.24 crore and is slated to start production from November 2005. "The OCP-1 is reaching the production stage in a record time of just 28 months," Rao said.

The Singareni management had to go for this railway line project via SPV route with RVNL as the original 151-km Kovvur-Bhadrachalam railway line proposal was left in the cold storage by the railway ministry owing to viability issues.

"Investment structure will be finalised once we sign a formal agreement with RVNL," the SCCL executive director said.

Khwaja to head SCCL for another year

The state government has extended the term of R H Khwaja, chairman and managing director of Singareni Collieries Company Limited (SCCL), by one more year. His present term is due to expire by this month end.

A 1976 batch IAS officer, Khwaja has been in the post for the past four years. The company had achieved a major turnaround during the last five-year period.