New Delhi: Union transport minister Nitin Gadkari has come to the rescue of a 8,500 crore project to build a railway corridor between Indore and Manmad, Maharashtra.

The 362-km railway corridor will be executed by a special purpose vehicle (SPV) with the Jawaharlal Nehru Port Trust (JNPT) and Indian Port Rail Corp Ltd (IPRCL) contributing 70% of the project costs. JNPT and IPRCL are both under Gadkari’s shipping ministry.

JNPT will hold 55% in the SPV, while IPRCL and the state governments of Maharashtra and Madhya Pradesh will provide equity share of 15% each, according to the memorandum of understanding (MoU) signed between them.

However, financial contribution of railways in this corridor will be nil. IPRCL will be the executing agency.

The project, approved in budget 2016-17, has been a non-starter because of paucity of funds with the Indian Railways and the state governments of Maharashtra and Madhya Pradesh.

About half of the Indore-Manmad railway corridor alignment passes through Maharashtra (Malegaon, New Dhule, Nardana, Shirpur) and half of it through Madhya Pradesh (Malwan, Chitawal, Lodhipura, Yashwant Nagar).

The new corridor is expected to reduce the distance between Indore and JNPT by approx 200km. It will also reduce the distance from Mumbai/Pune to key central India locations by 175km. The project passes through Delhi-Mumbai Industrial Corridor (DMIC) nodes such as Igatpuri, Nashik and Sinnar; Pune and Khed; Dhule and Nardana.

Gadkari said the project will benefit Madhya Pradesh and Maharashtra. “Since it connects industrial areas with the port so the shipping ministry decided to take a lead." He added that railways will also play an important role in the project by offering their guidance and expertise.

The Indore-Manmad railway corridor will reduce logistics cost for companies located in industrial hubs such as Lucknow, Agra, Gwalior and Kanpur as well as the Indore-Dhule-Bhopal region.