OREANDA-NEWS. April 21, 2015. A Memorandum of Understanding (MoU) was signed here today between Ministry of Railways, Ministry of Coal and Government of Odisha for formation of a joint venture (JV) to undertake project development, financing and implementation of identified projects for evacuation of coal through rail. The MoU was signed in the presence of the Union Minister of Railways Shri Suresh Prabhakar Prabhu and the Union Minister of State (Independent Charge) for Power, Coal and New & Renewable Energy Shri Piyush Goyal, Minister of State for Railways Shri Manoj Sinha and Minister of State Transport (Independent Charge) for Commerce and, Govt. of Odisha, Shri Ramesh Chandra Majhi.  Also present on the occasion among other were Secretary, Ministry  of Coal, Shri Anil  Swarup,  Railway Board Members, senior officials from Railway, Union Ministry of Coal and Odisha State Government.

The signatories to the MOU were Dr.A.K.Dubey, Additional Secretary, Ministry of Coal, Govt. of India, New Delhi, Dr. Sunil Kumar Bhargava, Chief Resident Commissioner, Government of Odisha and Shri Girish Pillai, Adviser/Infrastructure, Railway Board.

Speaking on the occasion, the Minister of Railways Shri Suresh Prabhu said that the coal sector is the largest customer of the Indian Railways as 50 per cent of the total generation of the two third freight earning comes from coal transportation only. As coal is common man’s fuel, there is a need to augment its production and it is the prime responsibility of the Railways to play a major role in its transportation to the end users. The Railway Minister stressed upon the need for greater synergy between all the relevant stakeholders, especially between state governments, Coal India Limited, Railways and this Joint Venture will certainly be a win-win situation for the three stake holders. The Railway Minister also said that similar joint venture will be signed with other state governments also and for other sectors also.

Shri Piyush Goyal said that signing of this MoU is a revolutionary step having potential to transform the overall economy of the country especially the economic landscape of eastern India. He said that there was a time when we used to import coal but now the production of the coal is increasing in our country and it is estimated that by 2020, the coal production in India as a whole will be around 1.5 billion tonnes. As a result of this MoU,  electricity will be reached to common man at affordable prices. Under this Joint Venture, the Railways will earn more freight revenue by providing a connectivity to the coal fields where as the state Government of Odisha will benefit by way of more royalty which will address the developmental deficits of the state.

Speaking on the occasion Minister of State for Railways, Shri Manoj Sinha said that in our country, coal is important for electricity generation and this MoU will facilitate the proper evacuation/transportation and utilization of our vast coal reserves which will lead to economic empowerment of the country. With the result of the result of this partnership, freight traffic of Indian railways is likely to increase by fifteen per cent, he added.

Minister of State Transport (Independent Charge) for Commerce and, Govt. of Odisha, Shri Ramesh Chandra Majhi while speaking on the occasion assured all possible cooperation and thanked the Government of India for this initiative.

Chairman, Railway Board Shri A.K Mital in his welcome address said that Indian Railways always encourages Public Private Partnership as well as state’s government’s partnership on the basis of win-win situation for all the stakeholders. He said that with  this initiative, Railways will further explore the possibilities to enter such Joint Ventures for other mine sectors in the country in future.

The salient features of the MOU are:

·             Ministry of Railways, Ministry of Coal and Government of Odisha will participate in the equity on its own or through its Public Sector Undertakings (PSUs) as nominated. The Ministry of Railways has nominated its PSU,  IRCON

·             The development of the corridors shall be implemented either through the proposed JV or through a separate project specific Joint Venture Companies (JVCs) /SPVs, as per IR standards.

·             The Joint Venture will have 64% shareholding from Ministry of Coal or its PSU, 26% from Ministry of Railways its PSU and 10% from Government of Odisha or its PSU.

·             The project specific JVCs will further explore participation of private investors, project promoters and other stakeholders including state governments in the project including equity.

·             The JV will have an authorized share capital of Rs.1000 crore with initial paid-up capital of Rs.50 crore.

·             The JV/JVCs shall enter into separate project specific concession agreement with MoR. Acquisition of land required for the project shall be done by JV/JVCs.  Entire costs of the land shall be borne by the JV/JVCs. 

·             Government of Odisha shall facilitate in completing the process of land acquisition and environmental / forest clearance(s) for the Projects as required.