Strong parentage
Chhattisgarh East Railway Limited (CERL) was established in 2013 by SECL, IRCON and GoCG for developing the East Railway Corridor and enhancing the coal production of SECL. SECL, the parent of CERL, is a subsidiary of Coal India Limited,  and has over 60 mines spread over Chhattisgarh (35) and Madhya Pradesh (25). It produced ~167 million tonnes of coal in FY2025. Ircon (formerly Indian Railway Construction Company Limited), responsible for the construction of rail infrastructure in both the phases, is an engineering and construction company specialized in transport infrastructure. The public sector undertaking was established in 1976, by the Government of India and is a wholly owned entity of the Ministry of Railways. Ircon has completed over 405 major infrastructure projects in India and over 130 major projects across the world in more than 25 countries. The rating derives strength from the strong parentage of CERL, the significant experience of such promoters in project execution, strong financial flexibility and also their sovereign ownership.
Acuité believes that such promoter linkages and execution capabilities will offset the project risks to a considerable extent in CERL.

Strategic importance of the East Rail Corridor
The Chhattisgarh East Rail Corridor is a strategically significant infrastructure initiative for the government, as it enhances the efficiency and reliability of coal transportation from multiple mines to thermal power plants, thereby strengthening India’s energy supply chain and supporting national power-sector objectives. The project holds particular importance for SECL, as it plays a strategic role in facilitating large-scale coal excavation and ensuring smoother, more efficient evacuation of coal from the region. Furthermore, the corridor is critical for decongesting existing railway lines and establishing new connecting routes to key mining areas, enabling improved coal movement toward northern, central, and eastern India. By improving freight capacity, reducing logistics constraints, and streamlining coal distribution across the state, the corridor is expected to boost industrial growth, generate employment, and contribute to long-term economic development in the resource-rich region of Chhattisgarh. The East Rail Corridor Project has been declared as a ‘Special Railway Project’ by the Ministry of Railways for which CERL has been nominated as the concessionaire for the East rail Corridor Project.

Improving scale of operations
The revenue of CERL has been improving aided by commissioning of major portion of infrastructure and increased traffic movement along the Phase I of corridor. CERL receives its share of revenue as 'freight charges' from the South East Central Railway (SECR) as 50% apportionment out of the total freight collected by SECR from the operations along this corridor. The CERL is also entitled to receive 60% inflated milage. Further, it also receives terminal charges at the origin stations. In FY2025, CERL recorded a revenue of Rs. 109.39 Cr as against Rs. 51.21 Cr in FY2024. The topline is further expected to improve, evident from 9M FY2026 revenue of Rs. 128.92 Cr. However, PAT continues to remain negative owing to high finance costs. Currently, the company has been servicing its interest obligations through unsecured opex loans infused by the promoters.

Delays in project commissioning
The CERL rail corridor project has encountered multiple instances of time and cost over runs. The Phase I was initially expected to be completed by October 2019 at a total cost of Rs. 3054 Cr, which later escalated to Rs. 3407.68 Cr. (Rs. 3302.71 Cr. incurred till Nov 2025) and timelines extended to June 2026. The delays occurred as project encountered significant challenges including clearance for forest land acquisition, diversion of tracks due to technical viability, disruption of construction activities due to the pandemic. Further, the company had to stop the work on the advice of Government of Chhattisgarh as coal blocks had been awarded to M/s Maharashtra State Power Generation Co. Limited (MAHAGENCO) and Chhattisgarh State Power Generation Company (CSPGCL) on the envisaged route. MAHAGENCO and CSPGCL requested CERL to realign the railway line to the extent it was falling within the boundaries of coal blocks awarded to them. Further, for Phase II the initial timelines are escalated from April 2026 to June 2027 owing to land acquisition challenges and design issues, with a total cost of Rs. 1686.22 Cr. (Rs. 648.20 Cr. incurred till Nov 2025). Therefore, any further delays in completion or cost overruns remains a key rating monitorable.