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New rly policy for coal & iron mines connectivity

Business

In a path breaking initiative, Ministry of Railways has announced a new policy for connecting coal and iron ore mines by rail. The policy called R2CI – Railways’ Policy for Connectivity to Coal and Iron Ore Mines provides incentive to the developers by way of return of capital; invested in the construction of the line over a period of 10-25 years through a surcharge on the freight. Railways will also undertake the operations and maintenance of the line at their own cost after the ownership of the line is transferred to Railways.
The policy has two models. These are; Capital Cost Model and the Special Purpose Vehicle (SPV) Model for flexibility. While the Capital Coast Model is relevant when there are two players, the SPV Model is meant to take care of a situation where these are one or two players, the SPV Model is meant to take care of a situation where there are a large number of players. This policy should enable the parties to take up constructions of the line and be free from the worry of operations and maintenance.
The demand for coal and iron ore is growing at a fast pace and rail is the only feasible and sustainable mode of transport. This policy is expected to hasten the development of rail network connecting the coal and iron ore belts for use.

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Sept 2020
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