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Posted on 14 June 2011
BUSINESS  
RAILWAYS

Freight corridor’s wait for green nod spikes cost by 50%

Samiran Saha
New Delhi

FREIGHT FRIGHT

2,800: Total length of Dedicated Freight Corridor

Rs 28,181 crore: Original project cost estimate

Rs 42,311 crore: Revised cost estimate for developing DFC

Effect: will hamper growth of Indian Railways

THE AMBITIOUS 2,800- kilometers-long Dedicated Freight Corridor (DFC) project that would connect the length and breadth of the country by rail has run into a cost escalation of Rs 14,130 crore as it awaits clearances from environment and forest department clearances.

Sources in the Ministry of Railways said the main reason for the project getting off the ground was the realignment of the route for the corridor which was being done to meet the requirement of the Ministry of Environment and Forest.

The two corridors, eastern and western, are to be built in two phases and were approved at an original project cost of `28,181 crore but due to the entire revision the project would now cost Rs 42,311 crores. Which is almost 50 per cent more than its previous estimate.

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The 1,800-kilometre eastern corridor from Ludhiana to Delhi to Howrah in West Bengal was scheduled to be commissioned by 2016 whereas the 1,000-kilometre long western corridor from Dadri in Uttar Pradesh to Mumbai in Maharashtra was expected to be commissioned by 2025, but delay in clearances will push the time line further.

For developing the western corridor, DFC Corporation India Limited 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.

The World Bank has already approved a loan of Rs 4,368 crores for the first phase of the eastern corridor, which will help finance the 343 km Khurja to Kanpur section.

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

The DFC project, once commissioned, would enable freight trains to run at an average speed of over 65 kmph as against 22kmph currently. The DFC programme will enable the country to create one of the largest freight operations in the world.

The DFCs will help railways boost its container traffic. At present, containerisation in India is merely30-35 per cent, as against international standard of 70 per cent. Also at present railway tracks in India carry an axle load of 22 tonnes, whereas the axle load in many other countries vary from 25 tonnes to 38 tonnes, the DFC, would also help Railways enhance their axle loads also.

The project will help the country create one of the largest freight ops in the world

The delay in implementation of the DFCs, sources said “will result in major delays to the project which is integral to the growth of Indian Railways. Once completed, the dedicated freight corridor will enable Indian Railways to be more-customer oriented and enable it to meet the market need in a more effective way. It will also help in developing industrial corridors and logistic park along its alignment.”

Industry chamber, Assocham has also expressed concern over in ordinate delays in implementing the ambitious infrastructure project on the dedicated freight corridors. “If implemented the project shall change the face of freight traffic business of railways which is due to problems in land acquisition and other issues,” the industry chamber said.

“It is imperative that all parties work in tandem to ensure the running of container trains. It will thus be viable business option capable of attracting capital investment needed for its growth,” the chamber added.

The DFC programme is scheduled to be completed in stages, with the western corridor (Delhi-Mumbai) and the eastern corridor (Ludhiana- Delhi-Kolkata) being the first two to be developed.

Samiran Saha is Assistant Editor, Business, FW.
[email protected]

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Posted on 14 June 2011
 

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