Bhubaneswar, Sep 4 (IANS): Union Coal Minister Piyush Goyal on Friday said he has suggested to the Odisha government to ink a joint venture with Coal India Limited (CIL) to create a rail network for evacuation of coal from the mines in the state.

"Since we are planning to increase the coal production in the coming years, we want to create a rail network around the coal mines for evacuation of coal in the next four-five years in Odisha," Goyal told media persons here.

Mahanadi Coalfields Ltd (MCL), a subsidiary of CIL, has set a target to produce 250 million tonnes (MT) of coal by 2019-20. MCL produced 121 MT coal in 2014-15.

Informing that seven coal mines of the state have already been allocated to public sector undertakings and private players, the minister said Odisha would earn about Rs.45,000 crore from e-auction of coal mines in the coming years.

Meanwhile, MCL has partnered with Odisha Industrial Development Corporation (IDCO) to form a Special Purpose Vehicle (SPV), namely, Mahanadi Coal Railway Ltd to develop railway infrastructure in the state, said an MCL statement.

SPV is a subsidiary company with an asset/liability structure and legal status that makes its obligations secure even if the parent company goes bankrupt.

The company would develop the Angul-Balram rail link covering around 14 km length in the initial phase, with a capacity to transport 92 million tonnes of coal.

In the second phase, the company is expected to take up the Jharsuguda-Barpali-Sardega rail link, which will enable Basundhara Coalfield to produce 85 MT as compared to its current production of 10 MT.

"This SPV will not only cater to the current evacuation need of the company but it will also identify the evacuation constraints, which impede the growth of MCL," added the statement.