New Delhi: The government Monday said it will form JVs with mineral-rich states for faster evacuation and transportation of coal to fuel power plants and make available cheaper electricity for the people.
It was stated at the signing of a pact between the Coal Ministry, the Railways Ministry and the Odisha government to form a joint venture (JV) for identifying projects for evacuation of coal through rail.
The Coal Ministry or its PSU will hold 64 percent stake, Ministry of Railways or its PSU 26 percent and the Odisha government will have a 10 percent equity in the JV, which will have an authorised capital of Rs 1,000 crore.
The JV will undertake projects worth Rs 3,689 crore that includes rail corridors of Brundamal-Jharsuguda, Sambalpur- Talcher, Sambalpur-Titlagarh and Raipur-Titlagarh doublings and Champa-Jharsuguda line among others.
Both, Coal Minister Piyush Goyal and Railways Minister Suresh Prabhu said it is a mega step towards affordable power generation.
"An MoU (Memorandum of Understanding) has been signed for a JV among Railways Ministry, Coal Ministry and Odisha government in line with Prime Minister Narendra Modi's dream for a team India for development projects," Goyal said.
Terming the JV a "win-win partnership for all" Goyal said through it a new history was being created in which various departments and ministries of the centre and states would work "as an organic entity to serve the nation and its people".
Odisha will stand to benefit tremendously as on account of more coal and minerals transportation from there it stands to benefit from huge royalty and auction revenues, he added.
Sale of coal and minerals will be done through transparent auction by Coal and Mines Ministries, he said.
Allaying fears that there would be power cuts on account of lesser generation from hydel projects during summers, Goyal said there was sufficient coal stock.
Prabhu said the Centre is looking at forming similar pacts for JVs with states including Chhattishgarh, Jharkhand and West Bengal for evacuation of coal and minerals.
"Coal is the biggest source of revenue for railways as its 50 percent revenue comes from it. There are shortages of railway links to mines. We have decided to give connectivity between mines and market for transporting coal and other minerals such as cement, steel and iron ore," Prabhu said.
These steps not only benefit the ministries concerned but also the people. He also termed the Coal and Mines Act as "big achievements" of the Modi Government.
Minister of State for Railways Manoj Sinha said initiatives by the new government like auction of coal have removed "corruption" from Indian politics.
Goyal said the JV will help in faster evacuation of coal as India aspires to produce 1.5 billion tonnes of the natural resource by 2020.
"The main target of this JV is that when 1.5 billion tonnes of coal is to be produced in 2020, there would be requirements of rail links for coal evacuation," he said.
Goyal said Coal India's output alone would be 1 billion tonnes by 2020 and total production would be 1.5 billion tonnes by then, which will rise significantly by 2031.
"Evacuation will be speedier through a mechanism which is independent of routine government functioning," he said adding that the JV will function independently.
The minister said Coal India, which is "the principal shareholder and investor" in the JV, has sufficient funds to invest and hence the projects will not starve for funds.
"We can leverage on the balance sheet of this JV to raise debt on the balance sheet and we can expeditiously execute the projects which otherwise often gets delayed for lack of funds... It is a pure profit venture. Coal India will increase production and will make more money from out of what it produces while keeping its cost low," Goyal said.
Ramesh Chandra Majhi, Odisha's Minister of State (Independent Charge), Commerce & Transport, said the state is rich in minerals and there is potential for huge increase in rail traffic for which infrastructure works are necessary.
As per an official statement, critical coal siding projects in Odisha will be fully funded by the respective coal companies while doubling of the line etc shall be implemented by Indian Railways with possible funding by Jvs.
"The project specific JVCs will further explore participation of private investors, project promoters and other stakeholders including state governments in the project including equity," it said.
The JV will have an authorised share capital of Rs 1,000 crore with initial paid-up capital of Rs 50 crore.
It added that acquisition of land required for the project shall be done by JV/JVCs and the Odisha government will facilitate in completing the process of land acquisition besides getting green nods required for the project.
"The construction work of the railway lines shall be undertaken only after the process of land acquisition and environmental/forest clearance(s) have been completed, and financial closure has been achieved," the statement said.
It said the Chief Executive Officer of the JV shall be an officer preferably with Railway/Infrastructure background.
