Krishnapatnam rail line MoU to be signed today

Project to be completed by June 2008

The 114-km railway line project between Obulavaripalem and Krisnapatnam in Nellore district, which is crucial for the take off of the much-delayed greenfield port to be built by Krishnapatnam Port Company Limited (KPCL), is all set to become a reality.

The MoU for the construction of the railway line, which was cleared by the railway board in the first week of this month, will be singed here on Saturday by the three joint venture partners "� Rail Vikas Nigam Limited (RVNL), KPCL and the state government.

Estimated to cost around Rs 500 crore, the project, once completed, will reduce the distance by 85 km for the iron ore exporters from the Hospate-Bellary region. About 14 million tonnes of iron ore cargo is expected to reach Krishnapatnam port annually for handling.

The port project proposal got the thrust due to the prospects of huge iron ore cargo availability. The project was originally conceived in 1997 for import of coal for thermal power stations proposed by GVK and others. But thermal power stations never materialised raising doubts over the port project, officials said.

According to sources, RVNL and KPCL would hold an equity of 30 per cent each while the state government would hold 13 per cent stake. The remaining equity is expected to be held by a consortium of iron ore exporters. The debt equity ratio and other details are expected to be worked out after signing of the MoU.

Things started moving after Navayuga Engineering Company picked up a majority stake in the Krishnapatnam port from Natco group.

Natco group still holds 26 per cent stake in the project as the promoter's equity. The development of the project is scheduled to be completed by June 2008.