KOLKATA (miningweekly.com) - Over the next few weeks the Indian government is expected to float a series of special purpose vehicles (SPVs) to invest $12-billion in the construction of rail linkages and coal evacuation infrastructure across three provinces.

The government has approved the creation of one SPV across each of the three eastern and central Indian provinces of Odisha, Jharkhand and Chhattisgarh. Government companies, Coal India Limited (CIL), Ircon International Limited, and the engineering and consultancy wing of the Ministry of Railways and Indian Railways would each contribute towards a majority equity stake in each of the SPVs, while respective provincial governments would be picking up minority equity holdings, a senior government official said.

These three specialised construction companies would implement 54 projects related to railway linkages to coal reserves in the region and allied coal evacuation logistics and infrastructure and would be in addition to the existing SPV - Chhattisgarh East Rail Limited - which had already undertaken projects in that province, the official added.

CIL would provide the bulk of the equity funding, contributing 66% of the equity base of each SPV, while Ircon would provide 24% of the required funding, and the balance would be offered by respective provincial governments.

India’s federal government and the Coal Ministry had advised that CIL, sitting on free cash reserves of around $8-billion, should leverage its cash on the books to take the lead in construction of logistics and evacuation infrastructure as it had been estimated that on completion of the 54 project, about 200-million tonnes a year of coal would be freed-up, the official said.

All of the 54 projects would be in addition to three railway linkages already under construction, which would free up a further estimated 300-million tonnes a year.

However, a grouping within the government expressed concern over the implementation of the projects considering that large tracts across the three provinces were a hotbed of armed left-wing extremism and possibly one of the reasons why no deadlines had been set for completion of the 54 projects.

According to media reports, National Security Adviser Ajit Doval was expected to have a review meeting of security agencies, paramilitary forces and intelligence officials engaged in fighting ultra left wing extremist insurgencies in view of a sudden spurt in violence in the three provinces over the past few months.

Earlier this month, about 12 security personnel were killed by extremists in Chhattisgarh alone with the latter attempting to consolidate its control over the territory and the government now planning to launch a fresh offensive and increase deployment of specialised paramilitary forces in the region.

Coal Ministry officials said that success in implementation of these projects held the key to CIL’s ability to hit the one-billion-tonne-a-year production target over the next five years, as laid down by the government, up from 494-million tonnes achieved in 2014/15.