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.