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Sagarmala invests Rs 125 cr. in Krishnapatnam Railway Company

Krishnapatnam Railway Co. Ltd (KRCL) a subsidiary of Krishnapatnam Port has received an investment of Rs 125 crore from Sagarmala Development Company Ltd for the development of the Rail Corridor connecting Obulavaripalle and Krishnapatnam Port. The new corridor will provide direct railway link from Krishnapatnam port situated in the east coast to Chennai Mumbai railway line.

 Krishnapatnam Railway Co. is a SPV (Special Purpose Vehicle) Joint Venture (JV) by Rail Vikas Nigam Ltd for connecting the 114 km Obulavaripalle (Kadapa district) and Krishnapatnam (Nellore) in Andhra Pradesh. The total project cost is estimated at Rs1,850 crore.

 The initiative will connect Krishnapatnam Port on the east coast with the network of Indian Railways at Venkatachalam at one point, and Obulavaripalle on the other. A 21 km section of the project line from Krishnapatnam to Venkatachalam was fully operation since July 2009 in single line, and was converted to double line from March 2014.

 Commented Mr Anil Yendluri, Managing Director, Krishnapatnam Railway Co., "This is an extremely exciting project for KRCL. The new rail corridor connecting Kadapa city with Krishnapatnam Port will help optimize costs, accelerate growth while enhancing the Port’s EXIM competitiveness. This would result in huge savings both in freight costs and time to help develop Kadapa into a discrete trading cluster through multimodal logistics solutions."

 India’s hinterland connectivity is mainly based on surface transport, i.e. road and rail. The 114 km long rail corridor is expected to revolutionize the ex-im trade dynamics for the hinterland district of Kadapa. It is well poised to reduce transit time drastically by offering a direct entry into the port.

 The shareholding pattern in KRCL is RVNL 30 per cent, Krishnapatnam Port Co. Ltd 30 per cent, NMDC Ltd 15 per cent, government of AP 13 per cent and BIL 12 per cent.

 Under phase II from Obulavaripalle to Venkatachalam (94 km), rail construction work is in full swing. Track linking of the entire length has already been completed. Overhead equipment and signal and telecommunications works are in advanced stage of completion.

Sagarmala is an ambitious initiative by the government of India aimed at bringing about real change in India’s logistics sector performance by unlocking the full potential of the coastline and waterways.

 The vision of Sagarmala is to reduce logistics cost for both domestic and ex-im cargo with optimised infrastructure investment. Sagarmala aspires to reduce logistics costs for ex-im and domestic cargo, leading to overall cost savings of Rs 35,000 to Rs 40,000 crore per annum

With infusion of new technology and capacity building, the total capacity available at ports can match demands but will not be able to handle additional traffic if the movement to and from the port is restricted. It is, therefore, important that connectivity of major ports with the hinterland is augmented not only to ensure smooth flow of traffic at the present level but also to meet the requirements of projected increase in traffic, said a release.

 In India, smooth connectivity to ports is even more important as the cargo generating centres are mainly in the hinterland instead of in the coastal region. The long lead distance increases the logistics cost and time variability within which the cargo can be delivered.

 Under Sagarmala Program, the endeavor is to provide enhanced connectivity between the ports and the domestic production or consumption centres. Under the initiative more than 210 connectivity projects have been identified for development.

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