Coal India issues tenders worth Rs 4,970 crore

September 28, 2020: Coal India (CIL) has issued two tenders with an aggregate amount of Rs 4,970 crore for construction of 135 km east-west rail corridor in Chhattisgarh.

The Chhattisgarh East West Railway (CEWRL), a special purpose vehicle (SPV), floated the tenders for the corridor from Gevra Road to Pendra Road.

CIL had formed two SPVs for construction of rail lines to evacuate increased quantity from Chhattisgarh.

The CEWRL will construct 135 km railway line, and the other SPV called the Chhattisgarh East Rail (CERL) will develop 136 km east rail corridor at a cost of Rs 3,055 crore. CERL is already partly operational.

The joint venture partners in CEWRL include SECL representing CIL and the Ministry of Coal with 64 percent stake and IRCON representing the Indian Railways with 26 percent stake. The Chhattisgarh State Industrial Development Corporation is the third partner with the remaining 10 percent stake.

IRCON which is the executing agency has floated the tenders for work after an SBI-led consortium of six banks released Lenders Confirmation Notice (LCN) for Rs 400 crore as first disbursement.

The east-west corridor includes a single rail line of 16 km from Urga to Kusmunda and feeder lines of around 35 km in the region. The 135 km railway line from Gevra Road to Pendra Road is a double line.

After commissioning, the east-west corridor will have capacity to move around 65 million tpa of coal from Mand-Raigarh and Korba coalfields of South Eastern Coalfields (SECL).

The rail project is anticipated to be completed by 2023. CIL has planned the two major lines alongside the development of Mand-Raigarh coalfields.

CEWRL’s east-west corridor is funded on a debt equity ratio of 80:20. The total equity is Rs 994 crore while the debt amounts to Rs 3,976 crore.

Of the debts of Rs 3,976 crore, SBI will be financing Rs 1,714 crore, Punjab National Bank, Bank of Baroda, Canara Bank and Union Bank of India will finance Rs 476 crore each while Indian Bank will finance Rs 358 crore.

A 44 km rail line of east rail corridor from Kharsia to Korichapar constructed by CERL went operational in October 2019. The rail line will eventually extend to Dharamjaigarh and finally till Korba. CERL has an evacuation capacity of 35 million tpa.

Source: Construction Week Online