Railways Sign Coal Transportation Agreement for Power Plan
16 Jun 2007

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In a significant move at facilitating power generation in the country, Indian Railways have signed a Coal Transportation Agreement with M/s Nagarajuna Power Corporation Limited (NPCL) which is setting up a 1015 MW thermal power plant near Padubidri near Udipi in Karnataka on Konkan Railway.  The Agreement was signed here yesterday among Southern Railway, Konkan Railway Corporation Limited and NPCL.  Under the agreement, the coal required for the plant will be transported by rail from new Mangalore Port to the plant covering a distance of about 36 Kms.  Coal required for the power plant will be imported at the port.  While loading of coal and a small lead of 5 kms is in Southern Railway, unloading siding will be in Konkan Railway jurisdiction.  Transportation of 2.8 MTPA of coal will be required for the power house.  The present agreement is on the lines of the agreement earlier signed with M/s Rosa Power Company Limited. 
Following are the salient features of the agreement:Railways will get committed coal traffic of 2.8 MTPA for a period of 25 years.
Indian Railways will supply BOBRN wagons for handling this traffic.  Total 89 rakes per month maximum will be required to be moved.
The company will pay additional 5% of the base freight charges on each tonne of coal loaded up to annual schedule quantity(28,00,000 tonnes) in a year.
The company will pay a bonus of 5% of the freight charges on the additional quantity actually transported over and above the stipulated 26,60,000 tonnes in any operating year.
If the company fails to load/unload as per the provisions, the quantity will be deemed to have been delivered.  Also, if the Company fails to offer the cumulative monthly scheduled quantity, the company shall be liable to pay the capacity charges under the Agreement for under-utilization of Railway capacity.
The Railways will have to make its best efforts to maintain a stock of 2.85 lakh tonnes at the powerhouse.
If the monthly quantity of coal is less than or equal to 95%, 5% liquidated damages as a percentage of freight charges will be payable by Railways.
If the coal stock at powerhouse is equal to or falls below 19,000 tonnes and cumulative amount of coal delivered in a month is also equal to or less than 85% then Railways will have to pay the penalty i.e. 5% on quantity between 85% and 95% and 100% for shortfall quantity below 85%.
The Company will create infrastructure facilities at their cost.  A development cess along with freight charges will be paid for development of facilities on Konkan Railway.  The cess will be capped at Rs. 10 crores.
For distribution of responsibilities and penalties between Railways and Konkan Railway Corporation, a MoU on sharing of responsibilities will be finalized and entered into.