Mumbai: South Korean steel major Posco and eight other companies have confirmed their participation in the Rs590-crore special purpose vehicle (SPV) to develop the Paradip-Haridaspur railway line. The nine companies are expected to sign the shareholders' agreement shortly.

Rail Vikas Nigam Ltd (RVNL), a wholly owned subsidiary of Indian Railways, with equity of 48 per cent, will lead the SPV. Posco (India) Private Limited, the Indian subsidiary of Posco, would pick up 10 per cent equity, the sources said.

The other players include Paradip Port Trust (10 per cent), Essel Mining Industries Limited (10.91 per cent), Rungta Mining and Industries Limited (10.91 per cent), MSPL Mining (5.45 per cent), Jindal Steel and Power Limited (1.82 per cent), SAIL (1.82 per cent) and Infrastructure Development Corporation of Orissa (0.66 per cent). The total debt-equity ratio in the SPV would be 1:1.

"Decks have been cleared for the signing of shareholders' agreement for the SPV with an objective to manage logistics in a very cost effective way," RVNL sources said.

The SPV was floated by RVNL along with five other players and the MoU was signed on May 25, 2005. Subsequently, POSCO, SAIL and MSPL joined the consortium considering favourable rate of return in the project.

RVNL has taken up 10 projects under the National Rail Vikas Yojana for implementation in West Bengal and Orissa. Four of them are in West Bengal and six in Orissa. These include new railway projects, doubling of lines, construction of a third as well as fourth line and electrification of railway tracks.

The Orissa projects include the 12-km Cuttack-Barang line (Rs127 crore), to be completed in 2007-08; the 20-km Rajatgarh-Barang line (Rs166 crore), to be completed in 2007-08; and the 35-km Barang-Khurda line (Rs133 crore), to be completed in 2007-08. The one in West Bengal, the 59-km Panskura-Haldia project, is estimated to cost Rs247 crore. The project is expected to be completed in 2008-09.