The Government of India launched the National Rail Vikas Yojana in December 2002 with the objective of achieving a significant improvement in ‘Rail Transport capacity’ on the congested Golden Quadrilateral and Diagonals and Last Mile Port connectivity. As a part of implementing the Rail Vikas Yojna, a Memorandum of Understanding (MoU) was signed between Ministry of Railways and RVNL on 16th October 2003, for creating Project specific SPVs in Public Private Partnership mode of finance.
Obulavaripalle- Krishnapatnam New Line (Port Connectivity) project was identified by MoR to be executed under NRVY. A MoU was signed on November 22, 2005 between Rail Vikas Nigam Limited (RVNL), Government of Andhra Pradesh and Krishnapatnam Port Company Limited to set up a Joint Venture Company as special purpose vehicle (SPV) to implement the New BG Electrified Rail Line between Obulavaripalle- Krishnapatnam.
Krishnapatnam Railway Company Limited was incorporated as an ‘Special Purpose Vehicle’ (SPV) on October 11, 2006 under Companies Act, 1956 with the objective of Construction, Operation & Maintenance of the 114 Km New BG Electrified Rail Line (a Green Field Project) from Krishnapatnam to Obulavaripalle. A Concession Agreement was signed by KRCL with Ministry of Railways (Govt. of India) on November 23, 2007.
Under the Concession Agreement, Ministry of Railways had leased out all the assets on the Krishnapatnam Line to the Krishnapatnam Railway Company Limited for a period of 30 years and authorized the Company to construct, operate, maintain, and manage the Krishnapatnam Railway line.