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World Bank approves $ 975-mn loan for DFC project

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World Bank approves $ 975-mn loan for DFC project

Business Standard:  June, 2011

New Delhi: The World Bank has approved a $975-million (around Rs 4,368 crore) loan for developing the first phase of the eastern arm of the Rs 77,000 crore Dedicated Freight Corridor (DFC) Project in India.

The 1,800-kilometre Eastern DFC is being constructed for freight specific transport of commodities by Indian Railways between Delhi and Howrah. “It will help finance the 343-kilometre Khurja to Kanpur section. It will increase load-carrying capacity of these freight-only lines and allow enhanced speeds of up to 100 km per hour,” the Washington-based multilateral lending agency said. The current loan has a maturity of 22 years, with a grace period of seven years.

For developing the western corridor, DFCCIL has already tied up with the Japanese Bank of Industrial Cooperation (JBIC) for Rs 4,500-crore funding as loan for the first phase, likely to be commissioned in March 2016.

Funding of Rs 11,500 crore for phase-II is also being tied up with the Japanese government. Phase-II is expected to be commissioned in December 2016.

Freight traffic on the Golden Quadrilateral linking the four cities of Delhi, Mumbai, Chennai and Howrah – and its two diagonals, Delhi-Chennai and Mumbai-Howrah, carries more than 55 per cent of revenue earning freight traffic of the Indian Railways. The existing routes of Howrah-Delhi on the Eastern Corridor and Mumbai-Delhi on the Western Corridor are highly saturated creating the need for dedicated routes. The DFC project, once commissioned, would enable freight trains to run at an average speed of over 65 kmph as against 22 kmph currently.