Connectivity Concerns: IPRCL set up to improve port-rail links

IPRCL set up to improve port-rail links

Evacuation is one of the biggest challenges being faced by Indian ports today. Though all major ports have double-line connectivity, routes to key destinations are congested. In order to ease congestion at major ports and provide efficient rail evacuation systems, the Ministry of Shipping formed a special purpose vehicle (SPV) in March 2015 – Indian Port Rail Corporation Limited (IPRCL).

Why the need for a dedicated institution

Though major ports and Indian Railways have taken up a number of connectivity projects, an urgent need was felt for focused attention and substantial resource allocation to the segment.

At present, there is poor communication between railway and port authorities, and this has led to delays in the evacuation of cargo and has further affected the efficiency of major ports. Further, rail-port connectivity projects have faced a number of issues such as shortage of funds, high capital costs along with slow and cumbersome approval processes. Further, at most major ports adequate rakes are not available, leading to delays in the evacuation of cargo. Thus, having a special dedicated corporation for implementing rail connectivity projects was the need of the hour.

cover (Page 1) Structure and objective of IPRCL

IPRCL was registered under the Companies Act, 2013 in July 2015, with an initial authorised capital of Rs 5 billion. The SPV is funded by 11 major ports (all, except Cochin) which will contribute 90 per cent of the equity, while Rail Vikas Nigam Limited (RVNL) will contribute the remaining 10 per cent. The Jawaharlal Nehru Port Trust (JNPT) has the maximum equity stake of 15.3 per cent, followed by the Kolkata Port Trust (KoPT), the Paradip Port Trust (PPT) and the Visakhapatnam Port Trust (VPT), each with a contribution of 10.8 per cent. The other seven major ports will hold the remaining 42.3 per cent.

The objectives of IPRCL are to provide efficient rail evacuation systems and to undertake projects involving last-mile connectivity to major ports. The SPV is responsible for modernising evacuation infrastructure, operating and managing internal port railway systems and raising financial resources for funding port-related connectivity projects. IPRCL will also assess intermodal gaps in handling rail cargo at major ports and develop suitable solutions to enable seamless cargo flow.

cover (Page 1)Progress so far

IPRCL has identified 22 last-mile connectivity and internal port rail projects, requiring a total investment of Rs 48.28 billion. As of August 2016, IPRCL had commenced work on five projects worth Rs 1.93 billion, and these are expected to be completed by 2017-18. Two connectivity projects have been awarded at Visakhapatnam port and one each at Chennai, V.O. Chidambaranar (VOC) and Kolkata ports. Besides this, IPRCL has prepared detailed project reports (DPRs) for 10 projects worth Rs 4.02 billion. For the remaining seven projects, worth Rs 42.33 billion, DPRs are currently being prepared.

One of the biggest projects being undertaken by IPRCL is the development of a dedicated rail freight corridor connecting the coalfields of Ib Valley and Talcher with the Paradip and Dhamra ports for the evacuation of thermal coal and for the movement of imported coal to various coastal power plants in southern India. The project is estimated to cost Rs 30 billion and will cover a track length of 540 km. Some of the other major projects are those for providing last-mile rail connectivity to the greenfiled Colachel port and providing railway connectivity from VOC port to power plants in Tamil Nadu.

To conclude, the dedicated port-rail corporation will help fast-track port connectivity projects. This, in turn, will help increase the percentage of cargo being evacuated from major ports via rail. However, going forward, a multi-pronged strategy for improving rail connectivity needs to be adopted. This includes faster turnaround of rakes at ports and at inland container depots, timely execution of connectivity projects, and optimising the existing line capacity at major ports.