Coal India Ltd (CIL) on Thursday said two large value tenders have been floated to construct 135 km east-west rail corridor at an estimated cost of Rs 4,970 crore in Chhattisgarh through an SPV.

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The railway line on completion will have capacity to evacuate 65 million tonnes (MT) of coal from the opencast mines of CIL arm South Eastern Coalfields Ltd (SECL), CIL said in a statement.

The development comes against the backdrop of CIL eyeing one billion tonnes of output by 2023-24.

"Setting the wheels in motion, two large value tenders for the construction of 135 km rail line from Gevra Road to Pendra Road, to be developed by CEWRL have been floated recently," it said.

IRCON, the construction arm of Indian Railways, has floated the tenders for the work. The tenders were floated after an SBI-led consortium of six banks who are the lenders to this rail corridor released Lenders Confirmation Notice (LCN) for Rs 400 crore as first disbursement in the first week of this month.

Engineering plans for CEWRL were already in place and now with finance tied up tender has been floated, CIL said.

CIL, in a bid to evacuate increased quantity of coal through rail mode from potentially high yielding opencast mines of its Chhattisgarh-based subsidiary SECL, has formed two Special Purpose Vehicles (SPV) for construction of rail lines.

"Chhattisgarh East West Railway Ltd (CEWRL) to construct a 135 Km east-west rail corridor at an estimated cost of Rs 4,970 crore and the other a Rs 3,055 crore SPV called Chhattisgarh East Rail Limited (CERL) to develop 136 Km east rail corridor," the statement said.

CERL is partly operational.

The joint venture partners in CEWRL include SECL representing CIL and Ministry of Coal with 64 per cent stake and IRCON representing Indian Railways with 26 per cent stake.

Chhattisgarh State Industrial Development Corporation Ltd is the third partner with the rest 10 per cent stake.

The east-west corridor also includes a single rail line of 16 km from Urga to Kusmunda and feeder lines of around 35 km in the region. The 135 km Gevra road to Pendra road is a double line. "After commissioning, the east-west line will have the capacity to move around 65 MT of coal per annum from Mand-Raigarh and Korba coalfields of SECL benefitting power plants in western and northern India," senior executive of CIL said, adding "this rail project is anticipated to be completed by 2023."

CIL has planned the two major lines concomitantly with the development of Mand-Raigarh coalfields. CEWRL's east-west corridor is funded on a debt equity ratio of 80:20. Whereas the total equity is Rs 994 crore the debt amounts to Rs 3,976 crore making it a total of Rs 4,970 crore.

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The cost of equity is borne as per the shareholding pattern of the SPV. Of the debt portion of Rs 3,976 crore, SBI shall be financing Rs 1,714 crore. Punjab National Bank, Bank of Baroda, Canara Bank and Union Bank of India will finance Rs 476 crore each while Indian Bank will finance Rs 358 crore. A 44-km rail line of east rail corridor from Kharsia to Korichapar constructed by CERL turned operational in October last year. This line will eventually extend to Dharamjaigarh and finally till Korba.