GVK Says Its Galilee Coal Rail Plan is More Advanced Than Rivals
GVK Group, building a $10 billion coal, rail and port project in Australia’s Galilee Basin, said its plan for a rail line is the most advanced among companies competing for government approval with construction due to start before the end of the year.
The Queensland state government is considering four proposals to transport coal 500 kilometers (311 miles) to export harbors, including one from billionaire Clive Palmer’s Waratah Pty and India’s biggest coal importer Adani Enterprises Ltd. The government says it will only allow one railroad.
“Our rail corridor is the most advanced in the Galilee basin,” G.V. Sanjay Reddy, vice chairman of GVK Power & Infrastructure Ltd. (GVKP), the group’s publicly traded unit, said today in an interview by phone from Brisbane. “Who will be selected is up to open competition and given that we believe we’re the first, I don’t see why we should be in a disadvantageous position from that point of view.”
GVK, controlled by Indian billionaire GV Krishna Reddy, together with its joint-venture partner Hancock Prospecting Pty, joins companies including Brazil’s Vale SA (VALE3) in developing $40 billion of coal projects in the basin. Hancock is the closely- held company of Gina Rinehart, the richest person in Asia, according to Forbes magazine.
Coal from the Galilee will help feed Asian electricity which, excluding Japan, is set to triple by 2025 with thermal coal remaining the main fuel for power generation, according to Royal Bank of Scotland Plc.
Developers need environmental approval from the Queensland government before they can start building railways. GVK said state elections scheduled for March 24 will delay its approval by a few weeks from the expected date in April.
“The critical element in the whole project is going to be when we get the” approval,’’ Reddy said. “I believe those approvals will come around the middle of this year.”
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