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Cabinet revises freight corridor cost to Rs 81,459 cr

In 2008, the CCEA had pegged the dedicated freight project cost at around Rs 28,181 crore.

The Government on Wednesday approved a sharp revision in the cost estimate for the Eastern and Western Dedicated Freight Corridor (DFC) Project at Rs 81,459 crore, including land costs and financing plan. In 2008, the Cabinet Committee on Economic Affairs (CCEA) had pegged the project cost at around Rs 28,181 crore. The DFC aims to spur economic growth and is being created for the exclusive movement of freight.

The revised cost estimate of Rs 81,459 crore, cleared by the CCEA on Wednesday, comprises construction cost of Rs 73,392 crore of the Eastern and Western DFC. While the Eastern DFC is now estimated to cost Rs 26,674 crore, the cost of the Western DFC has been pegged at Rs 46,178 crore. The Eastern and Western DFC passes through the States of Punjab, Haryana, Uttar Pradesh, Bihar, Jharkhand, West Bengal, Maharashtra, Gujarat and Rajasthan. “The land acquisition cost will be Rs 8,067 crore. This excludes the cost of the 534-km long Sonnagar- Dankuni section proposed to be implemented through the Public Private Partnership (PPP) route,” the government said.


Out of the total requirement of Rs 81,459 crore for the Eastern and Western DFC project, Rs 76,143 crore funding will be required during project construction, as interest worth Rs 5,316 crore during the construction for the Western DFC would need to be paid by the Ministry of Railways to the Ministry of Finance, after the moratorium period of 10 years. About Rs 52,347 crore would come from JICA and World Bank. Equity requirement from the Ministry of Railways (including land) for the project is Rs 23,796 crore.

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The Eastern DFC is expected to carry 153 million tonne (MT) of traffic in 2021-22, which will rise to 251 MT in 2036-37. The Western DFC is expected to carry 161 MT of traffic in 2021-22, which will increase to 284 MT during 2036-37. The project is expected to benefit the environment as traffic from road will move to rail resulting in reduction in 457 MT of CO2 over a 30-year period.

The Eastern and Western DFC projects are aimed at adding substantial transportation capacity, reducing unit cost of transportation and providing efficient transportation services to benefit power houses, mines, ports, trade and industry and the container sector. For the Eastern DFC, the commitment of World Bank loan is for $2.725 billion and the loan agreement for $ 975 million to cover the first package of 343 km from Khurja to Kanpur was signed in October 2011. For the second package of 402 km from Kanpur to Mughalsarai, the loan of $1100 million was signed in December 2014. For the third package covering the 447 km Dadri-Khurja-Ludhiana section, negotiations were finalised with World Bank for a loan of $650 million.

For the Western DFC, the commitment for the Japan International Cooperation Agency (JICA) loan is for 550 billion Japanese Yen and the first tranche loan agreements of 230 billion Japanese Yen for both Phase-I and Phase-II, have been signed.

First published on: 25-06-2015 at 00:53 IST
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