Hassan-Mangalore rail company breaks even

Mangalore: The Hassan-Mangalore Rail Development Company (HMRDC) Ltd — a project-specific special purpose vehicle formed by the Railways and the Karnataka Government — has reached break-even in the second year of its operation. The company handled 4.6 million tonnes of freight traffic during 2007-08 as against 1.6 million tonnes in 2006-07.

Ms Sarla Balgopal, Director and Chief Executive Officer of HMRDC, attributed this to improved operations of freight trains, leading to larger volumes being transported.

When asked if HMRDC’s feat was the shortest period of breaking even in such a project-specific SPV, Ms Balagopal declined comment. “It had been expected, when the line was commissioned, that with 4 million tonnes we could break even and that this would happen by the end of the third year. This figure was achieved in the second year itself,” she said.

It may be noted that HMRDC commissioned the Hassan-Mangalore railway line for freight traffic on May 5, 2006. A total of 1,945 trains, including 1,454 loaded with cargo and 491 empty, were run during 2007-08.

Ms Balagopal told Business Line that the bulk of the cargo transported consisted of iron ore. Iron ore contributed to 65 per cent to the total freight traffic handled by the company.

Iron ore cargo, which was at 8.25 lakh tonnes in 2006-07, increased to 3 million tonnes in 2007-08. Iron ore for export from Chitradurga and Tumkur districts contributed the largest share to revenue to the tune of 75 per cent.

Other cargoes such as limestone cargo contributed 13 per cent and fertilizer 10 per cent to the total freight traffic of the company. HMRDC has set 6 million tonnes of freight handling target for 2008-09, she added. Termed as the first of its kind in the country — in which a State government and the Railways came together to execute and operate a railway line — HMRDC was established in July 2003.

The Karnataka Government and Railways each hold 40 per cent stake in the company, New Mangalore Port Trust and Mineral Enterprises Ltd hold 9 per cent each.

The Karnataka Rail Infrastructure Development Corporation holds 2 per cent stake.