SAIL, rlys, others tie up to link iron ore mines

Written by Alok Sharma | New Delhi, Sep 27 | Updated: Sep 28 2007, 05:00am hrs
State-owned Steel Authority of India Ltd (SAIL) is all set to sign Rs 969-crore MoU with Indian Railways, National Mineral Development Corporation (NMDC) and Chhattisgarh government to lay 235 km railway lines connecting iron ore mines at Dalli-Rajhara-Raoghat-Jagdalpur with its steel plants.

"The linkage would provide impetus to movement of raw material to the steel plants and help Sail achieve the target of 23 MT steel making capacity by 2010. The memorandum of understanding between the four stakeholders would be signed soon and all necessary efforts to initiate the work would be made accordingly, secretary steel R S Pandey told FE.

When asked about the contribution from various stakeholders on the project, Pandey said that major contribution has to be done by Sail as the tracks would essentially be used to carry raw material from the mines to its plants. The public sector unit would contribute Rs 445 crore, while Indian Railways would shell out Rs 376 crore. The Chhattisgarh government and NMDC have agreed to contribute Rs 76 crore and Rs 71 crore respectively.

Railways would be doubly benefited as it would own the infrastructure without actually spending the whole amount and would also earn revenue through freight. On every 1 MT of finished steel, railways get freight charge on 4 MT of raw material.

Expansion and capacity augmentation of the railway network in Chhattisgarh would provide impetus to movement of goods within and outside the state. It will also improve the regions integration with the national railway system and enhance the competitiveness of industries located in the hinterland.