Ministry of Railways under National Rail Vikas Yojana has been strengthening the rail connectivity to various ports. In view of significant developments of ports in Gandhidham area, need for additional freight corridor to northern hinterland became necessary. Accordingly, Ministry of Railways (MoR) decided to convert existing meter gauge line between Gandhidham and Palanpur (301 RKM) to BG. When Rail Vikas Nigam Limited (RVNL), a PSU under Ministry of Railways came into being, this project was transferred to RVNL for execution. RVNL then was instrumental in setting up a Special Purpose Vehicle for gauge conversion of Gandhidham–Palanpur. Thus Kutch Railway Company (KRC) was formed with equity contribution from RVNL, Deendayal Port Authority (formerly known as Kandla port), Mundra Port & SEZ Limited and Govt. of Gujarat to undertake gauge conversion of Gandhidham-Palanpur meter gauge of 301 RKM. The Shareholders have contributed to the share capital of ₹ 200 crore to form KRC as per following %age :

KRC was incorporated on 22nd January’2004 under Companies Act, 1956. According to Memorandum of Association of KRC, the Company shall finance, construct, operate, maintain and manage railway project and facilitate in particular the gauge conversion of Gandhidham - Palanpur. KRC executed ₹500 cr project through equity(₹200 cr) received from shareholders and debt (₹300 cr) obtained from Banks. Thereafter equity was enhanced to ₹250 crore through Bonus share.

Under a Concession agreement signed between Ministry of Railways & KRC on 8th November 2005, MoR had leased all the assets including land, buildings, bridges, etc. on the above line to KRC for a period of 32 years and authorized KRC to finance, construct, operate, maintain and manage the Palanpur – Gandhidham project line.

KRC is carrying out the operations and maintenance of this rail line with Western Railway (WR), as their nominated operator w.e.f. July’2006.

Doubling: In order to increase the line capacity & to avoid saturation, doubling of Palanpur to Samakhiali (248 RKM) has been completed & commissioned successfully by Feb’2023. As a result, the major issue of diversion of rakes, which were taking place due to lack of line capacity & operational constraints, has been resolved. The additional line shall help industries in the area to make use of railways in transporting their goods in time & cost effective manner and enable seamless operations of trains.

Railway Electrification: KRC has executed & successfully commissioned the Railway Electrification (RE) works of Palanpur–Samakhiali (248 RKM) double line section and also executed & commissioned RE works on UP line of Samakhiali–Gandhidham section (53 RKM). The electrification of SPV line would reduce line haul costs, increased capacity, reduce operating & maintenance cost and shall help in reducing the use of imported crude oil and is more eco-friendly,

Bank Debt: KRC has partly funded the project through internal resources and have also availed a bank loan of ₹1000 crore for funding Doubling & Railway Electrification works.