Krishnapatnam Railway Co Ltd to get Rs.125 Crore from Centre for Rail link between Krishnapatnam Port-Obulavaripalle

NEW DELHI: Sagarmala Development Company (SDCL) has decided to infuse Rs 125 crore in special purpose vehicle KRCL, formed to provide rail connectivity between Krishnapatnam Port and Obulavaripalle in Andhra Pradesh.

Krishnapatnam Railway Company Ltd (KRCL) is a joint venture (JV) of Ministry of Railways, in which Rail Vikas Nigam (RVNL) has equity contribution. SDCL is a company formed under the government’s ambitious Rs 14 lakh crore Sagarmala initiative for identifying port-led development projects and provide equity support for the SPVs.

“The in-principle approval of the Board of Directors be and is hereby accorded for infusion of up to Rs 125 crore in the form of equity in Krishnapatnam Rail Company Ltd pending completion of further financial and legal due diligence,” the SDCL Board has resolved.

The total cost of the rail connectivity project between Krishnapatnam Port and Obulavaripalle is estimated to be at Rs 2,198.50 crore, of which Rs 1,458.9 crore will be met through debt, as per the financial information memorandum by SBI Capital Markets, which was roped in for the equity investment.

“The existing equity in the project is Rs 270 crore with additional Rs 125 crore envisaged to be infused by SDCL, Rs 187.5 crore of the equity requirement to be met by existing shareholders or by RVNL and the remaining Rs 159.1 crore through internal accruals.”

Implementation of the projects identified under the Sagarmala Programme will be taken up by the relevant Ports, State Governments / Maritime Boards, Central Ministries, mainly through private or PPP mode.

The Sagarmala Development Company Limited (SDCL) has been incorporated (on 31st August 2016) under the Companies Act, 2013, after obtaining approval of the Union Cabinet on 20th July 2016. SDCL has been set up under the administrative control of Ministry of Shipping with an initial Authorized Share Capital of Rs. 1,000 Crore and a Subscribed Share Capital of Rs. 250 Crore. SDCL will provide equity support for the project Special Purpose Vehicles (SPVs) set up by the Ports / State / Central Ministries and funding window and /or implement only those residual projects which cannot be funded by any other means / mode.

Objectives of SDCL

  • Develop & formulate projects emanating from the National Perspective Plan (NPP)
  • Assist project SPVs set up by Central Line Ministries / State Governments/State Maritime Boards/Ports etc. for projects in alignment with Sagarmala objectives
  • Provide funding window for residual projects that cannot be funded by any other means/mode
  • Prepare the Detailed Master Plans for the Coastal Economic Zones (CEZs) identified as part of the National Perspective Plan
  • Raise funds from multi-lateral and bilateral agencies as debt/equity (as long term capital), as per the project requirements