After many delays, Railways' 3,342-km freight corridor sees last-mile spurt

“RIP, Dedicated Freight Corridor.” Old timers in railways still recall the comment from a senior official from planning division during the first half of the last decade. Despite several such obits and procedural bottlenecks, the ambitious dedicated freight corridor (DFC) project, conceived 12 years ago, appears to have defied the pessimists. A fortnight ago, the Railways conducted a trial run on the 190-km Ateli-Phulera section of the Western DFC at a maximum speed of 100 km per hour in less than four hours. 

The project received the in-principle nod from the Union Cabinet in February 2006. The Rs 814-billion project, covering 3,342 km of track, will comprise an Eastern and Western DFC. The eastern route covers Mughalsarai-Allahabad-Kanpur-Khurja-Dadri-& Khurja-Ludhiana tracking 1,856 km. The Western DFC will link Jawahar Lal Nehru Port Trust to Dadri via Vadodara-Sanand-PalanpurPhulera and Rewari, covering 1,504 km. 

Twelve years later, the project is waiting for its formal commercial launch. But now, a deadline has been set. “We expect both the Eastern and the Western corridors to be commissioned by April 2020. Land acquisition is complete and work is progressing at a swift pace,” Railway Board Chairman Ashwani Lohani told  Business Standard last week. The original deadline was 2011and the delay has caused a cost overrun of almost four times the original 2008 estimate.

When conceptualised, the project was compared to the Alice Springs to Darwin railway line in Australia, which was completed in five years covering one of the most difficult terrains in the world. The Indian project will see a phase-wise commissioning only after 14 years. 

Land acquisition, the major stumbling block to any mega-project in India, was seen as the key cause for the overrun. But that is no longer the case. According to the Railways, about 98 per cent of land required for both corridors (except for the 540 km Sonanagar-Dankuni section in the eastern DFC) has been acquired.

“This government has been pushing the project more and the majority of the work has taken place only in the last three years. Despite that, land acquisition is being blamed as a reason for delay,” said R Sivadasan, former financial commissioner [2005-2007] of the Indian Railways. He suggests it would be better to inaugurate stretches like Dadri to Ajmer, so that existing railway lines parallel to DFC get some relief on traffic. Initially, the project was supposed to be commissioned by 2011. But was land the only bottleneck?

In the words of the Comptroller and Auditor General in 2014, “the delay in completion of the DFC project was mainly due to the lack of proper planning and implementation.” The delay in projects led to a cost overrun of 189 per cent from Rs 281.81 billion in 2008 to Rs 814.59 billion, including higher land costs — Rs 266.74 billion for the eastern corridor and and Rs 467.18 billion for the western corridor, plus land acquisition costs of Rs 80.67 billion. 
 

The increase in land costs, however, accounted for Rs 44.42 billion. The real culprit was faulty project planning. “Cost estimates changed at least three times, while the Western DFC, which was initially conceptualised as a diesel line due to strategic reasons like proximity to Pakistan was later converted to an electric line after 2011,” said another former board member.

He added that the conversion of diesel route to electric route was also a result of the involvement of Japan International Cooperation Agency (JICA), which is lending Rs 387.22 billion for the Western DFC. 

Under the arrangement, Japan wanted an assured purchase of electric locomotives from Japanese companies, sources said. The Eastern DFC is being funded by the World Bank through a loan of $2.360 billion, which was finalised much later during the first half of this decade.

Then again, there were flip flops on the financing of the project. During his stint as railway minister [2004-09] Lalu Prasad started collecting an additional surcharge on freight traffic for the DFC project. However, Mamata Banerjee as railway minister [2009-11] reversed the decision, allegedly bowing to populist pressures.  The surcharge would have added Rs 10 billion to the project kitty, annually.
 

The CAG report pointed to the fact that critical basic issues were not sorted out first. For instance, the railway ministry sought final cabinet approval for the project without finalising the alignment of the corridor, firming up financing or even preparing a  detailed cost estimate. According to the CAG report, even the timelines for completion of the project were not firmed up.  

The progress achieved up to March 2014 on awarding contracts was to the extent of 18.45 per cent and 21.32 per cent of the estimated costs in respect of WDFC and EDFC, respectively. Much to the credit of the National Deomcratic Alliance government almost all the contracts were awarded during their tenure. 

“In the last few years civil, electrical, signal and telecom and other contracts of Dedicated Freight Corridor Corporation of India (DFCCIL), the nodal organisation for setting up of DFCs, have increased. Cumulative contracts worth Rs 490.43 billion have been awarded, which is about 94 per cent of the total contracts. Civil contracts for 2,600 km (92 per cent), electrical contracts for 2,315 km (82 per cent) and S&T contracts for 2,315 kms (82 per cent) length have been finalised and works are in progress,” said an official close to the development.

From that perspective, 2020 doesn’t appear such an unrealistic start date after all.