Tag Archives: dedicated freight corridor (DFC) project

Draft Bill for rail tariff authority soon: Prabhu

Railways Minister Suresh Prabhakar Prabhu said on Friday the ministry would soon prepare a draft Bill to setup a authority, which would frame rules for passenger fares and rates talking into account efficiency parameters.

“The framework for the regulator will be uploaded on the rail ministry’s website soon for public discussion. Once it is finalised, we hope to convert it into a law and get it passed in Parliament,” Prabhu said, addressing a gathering of investors at a Confederation of Indian Industries (CII) event on public-private partnership.

The minister had earlier this month said the railways would decide on an “independent institutional mechanism” that will decide passenger fares and freight rates based on efficiency in the system. “We will have to create a new law and seek consultation with the opposition (parties) on it,” he had said.

Prabhu, who has been facing flak for the slow progress on key projects and the lack of capital spending, also announced the Rs 82,000 crore Dedicated Freight Corridor (DFC) project would be commissioned soon. “Also, our JVs with states will bring in 2-3 lakh crore of investments and additional 70-80,000 crore investment would come from the surplus money with PSUs. These are all PPP projects,” he said.

Prabhu announced In order to boost transparency, all railway tenders will be brought on e-tendering mode by the end of this fiscal. “We have converted the previous government’s theoretical figure of $1 trillion infrastructure investments in five years a reality. Now the private sector must work along with us rather than waiting in the wings telling us what to do,” he said.

is working on a target of Rs 1 lakh crore spending in the current financial year. Of this, around Rs 60,000 crore would be sourced from the finance ministry while the rest will be sourced from internal and extra budgetary sources.

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Posted by on December 7, 2015 in Uncategorized


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“We will start commissioning Dedicated Freight Corridors by 2018”

Interview with Adesh Sharma, Managing Director of Dedicated Freight Corridor

After years of delay, work on the Rs 81,000 crore Dedicated Freight Corridor (DFC) project, India’s ambitious attempt to reform freight transport, has picked up pace. With most of the land and funding requirement for the project tied-up, the management is confident of starting phased commissioning beginning 2018, Adesh Sharma, Managing Director of Dedicated Freight Corridor Corporation of India(DFCCIL) told Sudheer Pal Singh in an interview. Edited Excerpt

What is the overall progress of the project and what is keeping you busy currently?

The DFC Project has gained momentum and there is significant increase in the progress of work in Rewari-Iqbalgarh section of Western Corridor as well as in Khurja-Bhaupur section of Eastern Corridor, despite several land constraints. Funding for both the corridors has been tied up, except for Khurja-Ludhiana section of Eastern Corridor, where the negotiations with World Bank are going on.  Securing land and tying-up funds are the two most crucial steps for any infra project followed by the award of the contracts and monitoring the progress.  We are currently working on all the four stages simultaneously. Of the total 3,350 Km length of the DFC project, work is already in progress in 360 Km in EDFC and 650 Km in the WDFC. Civil contracts have been awarded for the Kanpur-Mughalsarai section of the EDFC during March, 2015.

What is the progress on land acquisition front? How would the ongoing discussions on the land bill impact the project?

Acquisition of land is the first requirement.  DFC is a linear project with a length of more than 3,300 Km, where a total land to the extent of 10,537 hactare is to be acquired.  So far, 8,874 hactare of land has been acquired which is 84 per cent of the total land requirement, excluding Sonnagar-Dankuni section (on PPP basis).  There are patches of land yet to be acquired affecting a length of 245 Km in Eastern Corridor and 113 Km on Western Corridor.  The matter is being vigorously pursued with the state governments. Most of these patches are in UP, Bihar, Gujarat and Maharashtra.  Acquisition of balance 16 per cent land is certainly an area of concern as the provisions of new Land Acquisition Act will apply soon.

What is the latest cost estimate for the project and how much of funding has been tied-up?

The total cost of DFC is Rs 81,460 crore excluding the Sonnagar-Dankuni section being built on PPP mode.  Of the total cost, two-third is arranged through debt and the rest is equity of the rail ministry. The EDFC is funded by World Bank. The WDFC is funded by JICA. The World Bank will provide a total loan of $2.725 billion. Agreements have been signed for two loan components for $2.10 billion.  The second loan agreement was signed in Dec 2014.  JICA will provide total loan of 645 billion Yen.  The expenditure till April 2015 is Rs 13,250 crore, including land.

What is the progress on placement of contracts? 

The process of fixing contracts was initiated after tying up the funds and achieving at least 75 per cent progress in land acquisition.  Contract for Rs 4,000 crore were awarded during 2013 in Khurja-Kanpur section of EDFC.  Similarly, contracts for Rs 7,000 crore were awarded between Rewari and Iqbalgarh during August 2013.  After tying-up funds for EDFC-2, recently a contract for Khurja-Kanpur has been awarded at a cost of Rs 5,080 crore in March 2015.  One more contract of electrification between Rewari to Vadodara was awarded in November, 2014 at a cost of Rs 4,000 crore.  Thus, so far civil contracts for 66 per cent of the length have been awarded in Eastern Corridor and 43 per cent in Western Corridor.  It is further planned to award 85 per cent of the contracts by March 2016 and balance 15 per cent by June 2016.

How confident are you of meeting the deadline of December 2019?  

We are fully geared up.  We are pursuing the acquisition of the balance 16 per cent of the land and fixing the contracts for all works including civil, electrical and signaling and telecom works.  The progress of the on-going works is being monitored at Managing Director level on daily basis.  We will surely complete the entire EDFC and WDFC by 2019.  Phased commissioning of DFC will start from the year 2018 onwards.

How would the project change the freight transport scenario? 

DFC will be a game changer in freight transport sector.  A freight consignment today takes 2-3 days to move between Delhi and Mumbai.  After completion of DFC route, the time will reduce to less than 24 hours.  Thus, DFC will provide very efficient, reliable and fast mode of transport.    This will help in improvement of railways’ share in transport from the present level of 36 per cent.  WDFC will involve movement of double-stack containers with electric traction for the first time in the world.  The average speed of trains will increase to 70 Km per hour compared to 25 Km per hour due to traffic constraints on Indian Railways. The unit cost of transport is also expected to reduce by 40 per cent making DFC economical as compared to other modes of transport.

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Posted by on May 21, 2015 in Uncategorized


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Railways says premium trains a hit, passengers beg to differ

With capacity expansion a priority for Indian Railways (IR), the government is in discussion with the World Bank and Asian Development Bank (ADB) for a funding mechanism.

IR, senior officials told Business Standard, could form a company or float a fund. “Discussion is on but we aim to get the funds flowing this year,” said one.

Last week, Finance Minister Arun Jaitley had said India’s partnership with ADB should move to a higher level. At the first business session of its 48th annual meet, at Baku in Azerbaijan, he sought its “deeper engagement” for developing smart cities, industrial corridors and railways, as part of the government’s flagship initiatives such as ‘Make In India’ and ‘Skill India’.IR says it has a shelf of pending projects originally estimated to cost Rs 491,510 crore. Of these, priorities such as doubling, new lines, gauge conversion, traffic facilities and electrification is estimated at Rs 208,054 crore. Officials said such prioritization can ensure a sustained flow of funds and focused attention given for completion. These will have a direct bearing on line capacity, ensuring higher earning and asset utilisation.

IR has identified 77 projects worth around Rs 1 lakh crore for being taken up in the first instance. Most of these are line doubling projects, where utilisation is more than 100 per cent of capacity. “One round of meeting with railway public sector units (PSUs) has already happened,” said an official.

Suresh Prabhu, the minister, had in his budget speech this February said IR would spend Rs 8.5 lakh crore over five years. “Around Rs 2.5 lakh crore of this would be raised as debt. This includes rolling stock financing through IRFC (the rail finance corporation). As the ministry cannot borrow, we are arranging debt either through IRFC or PSUs,” the official said. Lending from multilateral agencies would come through gross budgetary support from the ministry of finance, he added.Freight corridor

The World Bank, it has already been decided, is to fund a stretch of the 1,800-km eastern arm of the Dedicated Freight Corridor (DFC) project. The money is being planned in three tranches, for the stretches of Khurja-Kanpur, Kanpur-Mughalsarai and Khurja-Ludhiana.

Financing for the 725 km section between Ludhiana and Mughalsarai will be undertaken over three phases by the Bank. The first tranche of this loan, aggregating to $975 million (Rs 6,250 crore), has been signed.Another multilateral lending agency, Japan International Cooperation Agency (Jica), is funding the western corridor of DFC.

It is providing ¥677 billion (Rs 36,200 crore) as a loan to finance both construction and procurement of locomotives, on soft terms, for 40 years, with a payment moratorium of 10 years. The agreement for a first tranche of ¥90.2 bn for construction between Rewari and Vadodara and funding for Phase-II (Vadodara-Navi Mumbai port) for ¥266 bn has been signed.

DNA Indian

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Posted by on May 11, 2015 in Uncategorized


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Japan disinterest puts freight corridor bids on slow track

INDIA’S ambitious dedicated freight corridor (DFC) project is lurching from one hurdle to another, as Japanese infrastructure firms enjoying exclusivity in bidding for several projects develop cold feet, reports Rajat Arora in New Delhi.

Almost a year after Indian Railways invited bids for the R2,000-crore Vadodara-Sachin segment of the western corridor and after the deadline for placing the bids was extended five times, the national transporter could not ensure multiple bids for the stretch. And the railways, sources said, is now putting pressure on the finance ministry to renegotiate the terms of the tied loan for the western corridor from Japan International Cooperation Agency (JICA) so that non-Japanese bidders could also be allowed to participate.

As per the JICA loan contract, the lead partner for any project has to be from Japan and 30% of materials should be sourced from Japanese companies.

Although Indian joint ventures in which a Japanese firm has 10% stake will be treated as a “Japanese company,” for this purpose, but there are few such players.

Analysts said Japanese’ companies disinterest is because of their inability to take up many large projects at a time, and the fact that there are only three-four Japanese players in this area.

DFC’s eastern segment is part-funded by World Bank and the Railways is free to call global bids.

Sources said although four consortia – Fujita-IVRCL, Sojitz-L&T, Mitsui-IRCON and Marubeni- Tata- KEC-Gammon-GMR have been qualified for the 163-km Vadodara-Sachin project, none of them has since shown interest in bidding for the same. The railways has now set a deadline of June 2 for placing bids.

Last year too, the award of 322-km-long Iqbalgarh-Vadodara route of the western corridor had got delayed due to lack of bidder interest. A senior railway delegation visited Japan to take up the matter with Japanese authorities. Subsequently, Sojitz and Mitsui came in, and the project is now to be awarded in June.

“There are only three-four serious Japanese players bidding for several slices of the 1,483 km western corridor from Dadri to Jawaharlal Nehru Port Trust (JNPT). Their capacity is also getting exhausted as the projects seem to too big for them to tackle. We need more companies to participate,” said a senior railway ministry official. The national transporter has already awarded a 640 km stretch between Rewari and Palanpur in the western corridor to a consortium of L&T and Sojitz for civil construction. The size of the contract is Rs 6,700 crore. Remaining portions of the corridor are being bid out apiece.

Japan has given a soft loan of Rs 38,000 crore for the western corridor to India to be repaid over a period of 40 years. The railways has acquired 95% of the 11,000-hectare land required for the 3,300-km DFC, which entails a total investment of over Rs 80,000 crore

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Posted by on April 17, 2014 in Uncategorized


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