Minister of state for railways Bangaru Laxman told The Financial Express: "The Railways has created an agency (SPV) along with Gujarat Pipavav port, with equal contribution of Rs 90 crore each. The SPV will soon raise an additional Rs 90 crore by floating a bond issue".

The SPV's initial plans will be conversion of 163 kms of the line leading to the country's first private sector port from meter gauge to broad gauge. The conversion to broad gauge, which is expected to increase the number of freight rail arrivals considerably, is expected to be completed by next year.

The Pipavav port, located on the sourthern tip of Gujarat started operations in 1996. The nearest railhead Rajula is 23 kms from the port facility.

The Pipavav port has already drawn plans to construct three new berths by the end of next year and install four quay gantry cranes and 10 RTGs by February, 2001. The company is also building a full-fledged container stackyard measuring one lakh sq.ft., additional warehousing space of 75,000 sq.mts. and open storage area for bulk cargo of three lakh sq.ft.

The bulk, break and container cargo at the port is currently handled on a continuous dry cargo berth of 725 meters. The port has a dedicated liquid cargo jetty of 305 meters connected to the liquid storage area by pipelines."The Railways is working on inviting private participation in constructing a long distance line from Pipavav to Mumbra port in Maharasthra", Laxman said.

"We have already been sanctioned Rs 49.34 crore for constructing two additional lines between Thane and Mumbra," he added.

Laxman said the Railways was working on improving services on the Diva- Panvel corridor, where freight traffic was expected to go up substantially on account of movement of goods to Jawaharlal Nehru Port Trust in Nava Shava, Maharashtra.