The Hindu Business Line : Pact to create co for AP rly project

Rail Vikas Nigam Ltd, Government of Andhra Pradesh, Krishnapatnam Port Company and National Mineral Development Corporation plan to enter into an agreement to create a company for implementing Rs 588 crore Obulavaripalle-Krishnapatnam railway line project in Andhra Pradesh.

The shareholders agreement for the special purpose vehicle, Krishnapatnam Railway Company Ltd, is likely to be signed on Friday.

The project aims to provide rail connectivity for iron ore projects in the Hospet - Bellary belt to Krishnapatnam port. The new line significantly reduces the distance for iron ore exports against Chennai port, which has taken policy decision to stop handling dirty cargo from 2008.

The project would be funded through a debt-equity ratio of 1:1, with an equity element of Rs 270 crore and a viability gap funding of about Rs 50 crore. Rail Vikas Nigam Ltd would hold 30 per cent of equity, Government of Andhra Pradesh and its State Government agencies would hold 13 per cent, Krishnapatnam Port would own 30 per cent where as National Mineral Development Corporation would hold 27 per cent. — Our Bureau

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Pact to create co for AP rly project