Steel Authority of India Limited (SAIL) today signed a Traffic Guarantee Agreement with Rail Vikas Nigam Limited (RVNL) under the Ministry of Railways, Govt. of India for transportation of an assured volume of 5 lakh tonnes of imported coking coal per annum using the Paradip-Haridaspur railway line.
SAIL also handed over a cheque for Rs. 2.5 crore as its equity contribution in Haridaspur-Paradip Railway Company Ltd, which has been formed by RVNL as a special purpose vehicle (SPV) for development of an 82-km railway line in Orissa to connect Paradip port with the hinterland. SAIL had signed the shareholders agreement for formation of the SPV in October 2006.
By becoming a strategic investor in the company, SAIL is ensuring availability of required number of rakes from the Indian Railways for movement of imported coking coal to meet its increased production targets of 2010. The company will also enjoy reduced freight rates for some destinations.