MOU to be signed tomorrow for Indore- Manmad new railway line project

Ministry of Shipping

MOU to be signed tomorrow for Indore- Manmad new railway line project

The Project Will be Implemented Through Indian Port Rail Corporation Limited on Joint Venture SPV Model

Posted On: 27 AUG 2018 7:22PM by PIB Delhi

An MoU will be signed tomorrow between JNPT- Ministry of Shipping, Ministry of Railways, Govt of Maharashtra and Govt of Madhya Pradesh for implementation of 362 km Indore- Manmad New Railway Line Project. The project will reduce the distance from Mumbai/Pune to key central India locations by 171 kilometers.

The project passes through the Delhi-Mumbai Industrial Corridor nodes Igatpuri, Nashik and Sinnar; Pune and Khed; and Dhule and Nardana.

 The project is estimated to result in cumulative net economic benefits of Rs 15,000 crore in the first ten years of operations. Its Logistics advantages include providing a shorter route for passenger as well as the freight traffic originating from / terminating or  crossing through the region. The project will reduce the logistics cost for the cargo centres located in Northern India such as Lucknow, Agra, Gwalior and Kanpur belt as well as Indore – Dhule – Bhopal region to the gateway ports JNPT and Mumbai. It will be an alternate route to the existing central and western railway lines and will reduce congestion on the over utilized existing railway network. In addition, it will help in employment generation, reduction in pollution, fuel consumption and vehicle operating costs.

The Indian Port Rail Corporation Limited (IPRCL) carried out the  feasibility, traffic and bankability for the project.   Railway Board approved the implementation of the project through IPRCL on Joint Venture  SPV model. The proposed SPV would be in the form of a Joint Venture Company between Ministry of Shipping or its nominated PSUs/Entity including JNPT (which will be the main promoter), Government of Maharashtra or its nominated PSUs/Entity, Government of Madhya Pradesh or its nominated PSUs/Entity, and others. The equity participation would be in the ratio as under:

Project Stakeholders

Equity Share

MoS or its nominated PSUs/Entity including JNPT, which will be the main promoter.

55%

GoM or its nominated PSUs/Entity

15%

GoMP or its nominated PSUs/Entity

15%

Others (IPRCL, SDC etc.)

15%

Ministry of Railway: The SPV will enter into concession agreement with the MoR Ministry of Railways (All Statutory approvals) will pay Historical cost of land post concession to the SPV

The Cost and Financial indicators of the project are as under;

Financial indicators

Figures

Total Project Cost

Rs.8574.79 Crores

Pre-tax Project IRR

13.70%

Post Tax Project Financial IRR

11.44%

Equity IRR

15.90%

Economic IRR

14.57%

The project will be constructed within six years.

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Source: PIB