Railways keen on cement plants for rail link in Gujarat

Written by Prachi Karnik Pradhan | Mumbai, Oct 14 | Updated: Oct 15 2008, 05:42am hrs
The Indian Railways proposes to rope in cement players including Sanghi Cement, Jai Prakash Industries, Ahmedabad-based Deepak Cements and Chemicals and the Anil Dhirubhai Ambani Groups Reliance Cement for the 100-km railway gauge conversion.

The 100-km narrow gauge link between Bhuj and Nalia in Gujarat is currently used primarily by passenger trains. The conversion of the existing rail link will help cement companies for quick transportation of their raw material and finished products. It will lead to additional freight revenue for Indian Railways. The move of rail gauge conversion is also aimed at improving rail connectivity to the industries situated in coastal regions of Gujarat, said western railway chief freight operations manager Shailendra Kumar.

Kumar told FE that the huge demand for cement in Gujarats Kutch district has led to the setting up of cement plants over the next few years. Nalia, a region that is around 100 km from Bhuj and almost 159 km from Gandhidham area is rich in limestone deposits. Besides, the region has proximity to the coast. This is the main reason why cement companies are setting up plants in and around the region.

Kumar said the project of gauge conversion of the 100-km railway line is estimated at Rs 500 crore and the railway proposes to execute the project on a public-private-partnership model.

A senior railway official said at present the railways are handling freight traffic of 100 mt from the cement industry. After the conversion, the railways expect to double its freight traffic to 200 mt by 2011-12.

The official informed the cement industry has offered to fund up to 80-90% of rail link project through special purpose vehicle.

Apart from helping move freight, broad gauge conversion will also help passengers as they possibly will not have to change trains at Bhuj as the same rolling stock can be used to move towards the hinterland, he added.