The capital structure of SPV would comprise equity of Rs 180 crore and debtof Rs 90 crore with both the parties holding 50 per cent equity.

Sources claimed that the Railways and its undertaking, the ContainerCorporation of India (Concor), the Gujarat Pipavav Port Ltd and its partnerMaersk and the Central Warehousing Corporation Ltd (CWCL) would be thepartners in the new SPV. Investments already made by the Railways would formits equity contribution.

The Railways together with Concor and CWCL might hold 50 per cent of theequity. Concor is presently considering the proposal.

Ownership of the assets would remain with the SPV with the net earnings alsoaccruing to SPV.

The demand risk and the project/construction risk are to be borne by SPV.Traffic guarantees, as already offered by the Gujarat Pipavav Port Ltd,would now be given to SPV.

The gauge conversion of Dhola-Bhavnagar line would be done by the Railwaysat an estimated cost of Rs 90 crore. The SPV would enter into a managementagreement with the Railways for operation of this line.

The Railways would take a certain percentage of revenues as a charge foroperating the line. They would also recover the operational cost andmaintenance including the hire charges for wagons, locomotives and coachesfrom the SPV.

The project is expected to be completed within two years. The line wouldcarry 5 mt of traffic comprising cement, coal, foodgrains, containers andpetroleum products.

The Railways would also have the freedom of running their own trains on theline in addition to the traffic on port account. Union minister of RailwaysMamta Banerjee said that all cooperation would be extended to private portsin providing them connectivity with the railway system. Banerjee said thatprivate participation in the development of rail infrastructure would beencouraged significantly with a view to overcome the current resourcecrunch.