Railways signs trend-setting deal with Reliance Energy

New Delhi, Jan 23 (UNI) Signalling its intention to give a stiff competition to surface transport in freight operations, the Railways today signed a trend-setting agreement with the Anil Ambani-owned Reliance Energy Ltd for transportation of coal from mines in Jharkhand to REL's power station in Uttar Pradesh.

As per the agreement, REL's Rosa Power Supply Company Ltd (RPSCL), which was previously owned by Indo-Gulf Fertilizer Company, will build, own and operate a 600 MW coal-fired power station at Rosa in Shahajahanpur district in Uttar Pradesh. The Railways will transport committed coal traffic of 27 lakh tonnes per annum from Central Coal Field mines in Jharkhand to the power company for a period of 25 years.

The agreement was signed between Mr Subroto Mukherjee, Chief Transport Planning Manager, East Central Railway, and Mr Ashwini Kumar, Director, RPSCL at Rail Bhavan here in the presence of Railway Board Chairman J P Batra.

Terming the agreement as ''landmark'' in the annals of Indian Railways, Mr Batra said it contained and defined the broad parameters for similar deals in future.

''We have received similar inquiries from Nagarjuna Power Ltd, which is setting up a 1000 MW thermal power plant at Udupi in Karnataka,'' he said.

The obligations of Railways under the deal will involve transportation of 27 lakh tonnes of coal annually to RPSCL, besides deployment of required number of wagons to ensure timely delivery of coal to the company.

Further, the Railways will maintain a coal stock at the power house to the tune of 2.85 lakh tonnes.

''Railways have undertaken and guaranteed irrevocable placement of rakes, transportation and delivery of coal as provided in the agreement,'' he said.

Five per cent of freight charges will be paid by the Railways on the shortfall in quantity if cumulative amount of coal delivered is less than or equal to 95 per cent.

It will have to pay 100 per cent of freight charges for shortfall in quantity if the coal supply is below 85 per cent and coal stock at the power station is equal to or less than 19,000 tonnes.

With regard to the obligations of RPSCL, Mr Batra said the power company would be responsible for loading and unloading a maximum of 92 rakes in a month, excluding such additional rakes which may be needed to maintain the coal stock.

It will pay a premium equal to five per cent of the freight charges on each tonne of coal loaded up to 27 lakh tonnes.

''If the Railway transports coal in excess of 25.65 lakh tonnes in any year, the company shall pay to the Railways a bonus of five per cent of the freight charges on the additional quantity actually transported,'' says the agreement.

Further, if the company fails to offer the scheduled quantity in accordance with the provisions of the agreement, the RPSCL will pay 'capacity charges' to the Railways. These charges will depend on the actual detention of rakes.

If the company fails to load or unload the rakes placed by the Railways, certain coal quantity will be deemed to be delivered depending on the hours of detention.

Mr Ashwini Kumar, said the plant would go on stream in 2010 on the completion of its first phase. ''We are planning to expand the capacity of the plant in subsequent phases.'' UNI