On The Slow Coach
Business Today|April 18, 2021
Fifteen years in the making, only 650 km of the dedicated freight corridor has opened. Meeting the 3,381-km target by June 2022 appears a distant dream
ASHUTOSH KUMAR

Prime Minister Narendra Modi inaugurated two sections of dedicated freight corridors (DFCs) in quick succession in December 2020 and January 2021. Immediately after, videos of kilometres long double-stack container trains chugging on the new lines emerged on social media handles of Ministry of Railways and Railway Minister Piyush Goyal. The trains hit top speed of 93 km per hour and average speed of 67 km per hour as against 23 km per hour clocked by a normal goods train in India.

The new lines — 351-km KhurjaBhaupur section of the Eastern Dedicated Freight Corridor (EDFC) and 306-km Rewari-Madar section of the Western Dedicated Freight Corridor (WDFC) — are barely 20 per cent of the corridor. The 1,875-km EDFC will connect Ludhiana in Punjab with Dankuni in West Bengal. WDFC is a 1,506-km corridor between Dadri in Uttar Pradesh and Jawaharlal Nehru Port Trust (JNPT) in Mumbai. The much-awaited project has seen multiple delays over the years due to land acquisition and other issues.

The entire project, stretching 3,381 kms, however, still has a long way to go. The two completed sections, spanning 650 kms, are less than one-fifth of the total length, surprising for a project that has been under construction for more than a decade and a half. Meeting the latest deadline of June 2022 — the original date of FY18-end was revised to March 2020 and then to December 2021 — is a tall order considering the stage at which the project is at present.

The need for a DFC was felt because trunk freight routes of Delhi– Mumbai and Delhi–Howrah were saturated, with line capacity utilisation varying from 115 per cent to 150 per cent, slowing movement of goods. Railways were losing their share of freight traffic to truckers — The share of railways in total freight carried fell from 83 per cent a few years after independence to 35 per cent in FY12, according to data from the railway ministry.

Cost Factor

The delays in the project have proved to be costly. When the Cabinet Committee on Economic Affairs (CCEA) approved the project in 2007, the capital cost was₹28,181 crore. The CCEA announced a revised cost of₹81,459 crore in June 2015. The current cost of the project is estimated to be₹95,238 crore. The cumulative capital expenditure incurred till November 2020 was₹67,971 crore, according to government data.

Japan International Cooperation Agency (JICA) is funding WDFC while the World Bank is funding EDFC. JICA has provided₹33,000 crore till date under the concessional Official Development Assistance (ODA). The repayment period in ODA is 40 years with a grace period of 10 years. The interest cost is 0.1 per cent.

Tough Task Ahead

The railway ministry and Dedicated Freight Corridor Corporation of India Ltd (DFCCIL), the special purpose vehicle (SPV) implementing the project, have to inaugurate 13 sections in the next 15 months till June next year (there is an additional 538-km section on EDFC between Sonnagar and Dankuni which will be taken up on a public private partnership, or PPP, basis at an investment of₹15,926 crore; this does not come under the June 2022 deadline).

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