Indian railways on Wednesday signed a memorandum of understanding (MoU) with Coal India (CIL) for providing cargo wagons for the exclusive use of the state-run firm.
According to the ministry of railways, the MoU will lead to the procurement of 2,000 wagons or 33 rakes in the first outgo, which will facilitate in increased evacuation of coal from CIL.
"Under this strategic partnership, the wagons will be procured by Indian railways on behalf of CIL, the maintenance of these wagons will be done by railways at its own cost. Also, the brake vans will be provided by railways itself," the ministry was quoted in a statement as saying.
"The MoU will benefit the economy as a whole and the railways, the coal and power sector in particular."
Elaborating on the MoU, Railway Minister Suresh Prabhu said that this is a path-breaking agreement which will result in speedy supply of wagons for coal loading in dedicated circuits.
Prabhu informed that the initial investment of Rs.500 crore will lead to an anticipated investment of Rs.5,000 crore.
Speaking on the occasion, Minister of State (independent charge) for Coal, Power and New and Renewable Energy Piyush Goyal said that the MoU will help in fulfilling the one billion tonne target of CIL.