The Ministry of Railways has announced a new policy for connecting coal and iron ore mines by rail. The new policy will be called R2CIâ€”Railwaysâ€™ Policy for Connectivity to coal and iron ore mines provides incentive to 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 the Indian Railways.
The policy has two models; Capital Cost Model and the Special Purpose Vehicle (SPV) Model for flexibility. While the Capital Cost Model is relevant when there 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 will enable the parties to take up constructions of the line and be free from the worry of operations and maintenance and is expected to hasten the development of rail network connecting the coal and iron ore belts for use.