Subsidiary of Rites to set up three GW solar plants for Indian Railways

Subsidiary of Rites Limited, Railway Energy Management Company Limited (REMCL) won its largest mandate from Indian Railways for handling tendering, installation supervision and managing power supply from three GW solar power plants which will be set up on vacant Indian Railway land.

Rites Limited holds 51 per cent stake in REMCL and the balance is held by Indian Railways. REMCL is in the business of power management and generation of power. It handles the entire power procurement under open access for Indian Railways, along with handling renewable energy and energy efficiency projects.

The given project will be split into three phases of 1 GW each. The first and third phase of 1 GW each will be on PPP basis under design, build, finance, operate and transfer model. The second phase of the project (1 GW) will be on ownership model of REMCL, eligible for capital subsidy under CPSE investment scheme. The Railways have already found satisfactory land to be leased to REMCL on nominal lease rent.

During the life of the project, REMCL would earn long-term revenue amounting to Rs 20 crore per year through supply management from these installations. It would also be earning bid management fees at the beginning of the project. The whole project is predicted to be completed by 2022-23.

The consolidated order book of Rites Limited reflected an amount of Rs 5,782 crore as of December 31, 2019 which gives it revenue visibility for next two to two-and-a-half years.

In the early morning session on Friday, Rites’ stock surged 5.1 per cent to Rs 251 from its previous close of Rs 238.80 on BSE.