JSW to Develop Rail Link to Connect Jaigarh Port

Mumbai: The JSW Group on Sunday signed a 30-year concession agreement with the Konkan Railway to build a 34-kilometre, Rs 771-crore rail link to connect its Jaigarh port on the Konkan Coast.

The group said it's looking at Rs 500 crore income from its ports operations this fiscal year and 200 million tonnes of cargo capacity by 2020.

"We expect to clock Rs 500 crore in operational revenue this fiscal, up from Rs 350 crore last fiscal from our three ports. Also, we have an ambitious plan to have 200 million tonnes of cargo capacity at ports by 2020," JSW Group chairman and managing director Sajjan Jindal said here.

To achieve the ambitious cargo capacity, Mr Jindal said the company is open to acquisitions and is keenly looking at the east coast for the same since it has good presence on the West Coast.

The rail link will connect JSW Jaigarh port with the upcoming Digni station through a greenfield 33.7-km railway corridor. Of the total length, as much as 18 km will have tunnels, Mr Jindal said, adding that the railhead is expected to carry 12 mt of cargo per annum on completing 30 months from now.

The PPP (public-private partnership) project will be implemented by JSW Infrastructure, an arm of the JSW Group, which will hold 63 per cent, Konkan Railway 26 per cent and the Maharashtra Maritime Board the remaining 11 per cent, JSW Infrastructure joint managing director and chief executive BVJK Sharma said.

The agreement was signed in the presence of Railway Minister Suresh Prabhu and Maharashtra Chief Minister Devendra Fadnavis.

Mr Prabhu said this is the first PPP project since the Railway Budget was presented in February and expressed hope that more states would come forward with such projects to develop rail infrastructure.

JSW won the contract following a competitive bidding and the agreement is to build, operate and maintain the railhead for 30 years.

Out of the estimated Rs 771 crore investment, Rs 191 crore will be equity and the rest will be debt, Mr Sharma said.

With a 20-metre natural draft, Mr Jindal said the Jaigarh port has the deepest draft in the country and therefore, has tremendous potential as it's an all-weather deepwater port. Plus, booming industrial activities in western Maharashtra will feed to the profitability of both the port as well as the upcoming railhead.

On securing cargo for the Jaigarh port as the Maharashtra Coast already has many other operational ports, Mr Jindal said he is not worried as a port and rail link will lead to faster industrialisation.

Currently, the port has a capacity of 15 million tonnes per annum with two berths and is expanding rapidly to achieve a capacity of 65 mt by 2020. Last fiscal, it handled 8.4 mt of cargo, of which 60 per cent was captive, which Mr Jindal expects to come down as the rail link gets operationalised within the next three years.

On green clearance, considering that the project is coming up in the ecologically-sensitive Sahyadris in the Western Ghat, Mr Jindal said that since more than half the railhead (18 km) will be passing through tunnels and the rest through non-forest areas, he does not expect any hiccups.

The Jaigarh port is also working on allowing direct berthing of next generation vessels and very large crude carriers.

JSW Infrastructure has an installed capacity of over 33 mt at its three ports - Dharamtar port near Mumbai, South West Port terminals in Goa and Jaigarh Port in Ratnagiri.

Last year, it handled about 24 mt cargo. Of this, Jaigarh port handled 8.5 mt cargo.

The JSW Group had inked a 50-year concession agreement with the Maharashtra Maritime Board in June 2008 to develop the multi-purpose common user Jaigarh Port on the Damankhol Bay on the banks of the Shastri river, 110 nautical miles off South Mumbai and 126 nautical miles north of Goa.