Following a tie-up initialled in March this year, Australian freight major Aurizon has made an upfront payment to GVK Coal Infrastructure (Singapore) Pte Ltd (GVK Hancock).

Confirming the upfront payment, a source at GVK, however, declined to furnish details on the quantum of payment.

“The transaction is a significant development related to the project. We cannot announce further details of the payment at this stage. It constitutes a part of the $6-billion project concerning the rail and port projects in which Aurizon has 51 per cent stake,” the source said.

As per the deal singed early this year, GVK Hancock and Aurizon have agreed to jointly develop a rail line and a new coal terminal at the existing Abbot Point Port. The idea is to unlock the Galilee Basin’s coal resources, including GVK Hancock’s Alpha, Alpha West and Kevin’s Corner coal projects.

The agreement stipulates that Aurizon would hold a 51 per cent stake in Hancock Coal Infrastructure Pty Ltd (HCI), which owns Hancock’s rail and port projects, and would invest through upfront consideration on completion of the transaction.

The company would also make remaining undisclosed payments to GVK at every financial closure of each phase of the projects.

The tie-up with Aurizon is to facilitate equity and debt funding for the projects to reach financial closure.

The company is expected to construct 300 km of the total 500 km of new corridor and railway track, and the same will be connected to the existing Aurizon infrastructure.

This will also allow a phased development at the Abbot Point T3 terminal to match the volumes and ramp-up, thereby materially reducing the initial cost of infrastructure.

G.V. Krishna Reddy, Chairman, GVK, said, “We have made significant progress towards realising this project. This milestone symbolises our common vision.’’

Aurizon Managing Director and CEO Lance Hockridge said, “There’s been considerable work by both parties over recent months to better define the rail transport solution for the project, both from engineering and commercial perspectives.”

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