What the Dedicated Freight Corridor Corporation's new avatar will look like

Smaller, high-frequency routes, and possibly faster execution could be the focus

Union Minister for Railways Ashwini Vaishnaw recently made a major announcement regarding dedicated freight corridors (DFCs), saying that the Centre, which had so far been building integrated 1.000-plus-kilometre corridors, will now focus on micro freight corridors that have the potential of generating revenue for Railways.

The project, which finally started in 2015 after nine years of inactivity despite receiving financial sanction, currently has two major corridors under its mandate. The Eastern DFC connects Ludhiana (Punjab) to Dankuni (West Bengal), while the Western DFC connects Rewari in Haryana to the Jawaharlal Nehru Port Trust (JNPT) in Navi Mumbai, Maharashtra.

The two corridors together cover a distance of over 3,300 km. For a simpler understanding, the western corridor is often dubbed as the industrial corridor, connecting to significant ports such as Mundra, Kandla, Pipavav and JNPT, and various northern and north-western industrial cities. The Eastern DFC, after its completion, is likely to cater to both industrial and energy needs, with connecting routes to coal-producing states, and passing through areas rich in a variety of raw materials for manufacturing, such as iron ore, bauxite and coking coal.

Moreover, three new DFCs currently under consideration are the East Coast corridor, which is 1,115 km long, the East-West corridor, which is over 1,800 km long, and North-South corridor, which will cover almost 1,000 km. It is in this context that the new avatar of the Dedicated Freight Corridor Corporation (DFCC) assumes significance.

“We will also take up many focused freight corridors. For example, in Chhattisgarh, a corridor, which is 180 km long and can add 70-80 million tonnes of cargo, will be taken up. In Odisha, a 200-km corridor to connect a port and a major mining area can add 100 million tonnes, so we should take it up,” Vaishnaw said last week.

He proposed a similar model in Jharkhand, citing a potential corridor as small as 18 km. Railways officials Business Standard spoke to said that these micro corridors have been under consideration for a long time, and focusing on these leads to a significant benefit — they can be individually pursued expeditiously instead of making them a part of a much longer corridor, which would require longer planning and lengthy approval procedures.

Additionally, full-fledged 1,000+ km corridors would also face issues in terms of financial sanctioning, since they're expensive, needing a tougher justification required in terms of economic viability. The eastern and western DFCs are currently being built at a cost of Rs 1.27 trillion, while the three new DFCs are pegged at anything between Rs 2 trillion and Rs 3 trillion.

“There is a sizable revenue potential far outweighing the costs in micro or focused corridors,” another official said, adding that there shouldn’t be funding issues for these.

Business Standard had reported in May that the ministry was mulling scrapping the three new DFCs in favour of enhancements in existing corridors through smaller, connecting corridors where there is a significant revenue potential.

As its two flagship projects – the eastern and western DFCs – transition from construction to operation, the DFCC might see a new avatar soon — one that focuses mainly on smaller, high-frequency routes, and possibly faster execution.