Railways, CIL in talks over 538-km eastern freight corridor stretch

The Indian Railways is in talks with its largest customer, Coal India (CIL), and the governments of Jharkhand and West Bengal to partner it on a fresh lease for the 538-kilometre stretch of the Eastern Dedicated Freight Corridor (EDFC). Earlier, the railways had planned to undertake the project as a public-private partnership (PPP).

Though, the Centre is looking for partners for the Sonnagar (Bihar) to Dankuni (West Bengal) stretch of the EDFC for almost a decade, the project was getting a lukewarm response from the private sector even after several rounds of investor meets and offer of sops such as viability gap funding (VGF). The railways is expected to float a tender by October. This stretch is expected to cost around Rs 15,000 crore, while the remaining EDFC is being funded by a $2.360-billion loan from the World Bank.

Ahead of the tender, the Dedicated Freight Corridor Corporation of India (DFCCIL) is likely to undertake road shows to sensitise potential investors. The national transporter has already begun talks with CIL, other public sector undertakings and the state governments for the completion of this stretch, sources said. The stretch is divided in two phases - 282.22 km from Dankuni to Gomoh in Phase-I and 256.58 Km from Gomoh to Sonnagar in Phase-II. So far, about 85 per cent land has been acquired for the project and based on the latest estimates, the Dankuni to Gomoh stretch is likely to cost Rs 7,527.22 crore.

However, sources within CIL said the company is yet to get any official information in this regard. One of the major advantages for the company, industry experts said, is that the Sonnagar to Dankuni stretch would help the company in faster evacuation of coal from its blocks in Jharkhand and Odisha. It will also help in linking the planned rail corridors implemented in the special purpose vehicle (SPV) model with the corridor. 

The major projects implemented under the SPV include a 47-km stretch at Shivpur-Kathautia (Jharkhand), 136 km from Kharsia to Korichhapar (Chhattisgarh), 122 km from Gevra Road to Pendra, another 14 km in Chhattisgarh, and the Angul-Balram railway link in Odisha. This includes 84 projects costing around Rs 98,977 crore to boost coal traffic, of which 14 are being taken on a priority basis.  

According to a CIL official, the PSU is already investing in three dedicated coal corridors; parts of which have already been completed. It is procuring its own rakes to ferry coal. 

The investment may also help the company once its proposed coal to liquid project is on stream in West Bengal's Dankuni Coal Complex. For the state governments, too, the PPP project may turn a game changer as it covers 196 km in Jharkhand and 203 km in West Bengal.

Interestingly, the plan to woo PSUs comes at a time when the progress of the Rs 81,400 crore Eastern and Western dedicated freight corridors covering a total of 3,360 km track is being monitored by the Prime Minister's Office.  The project, to be completed by December 2021, (excluding the Sonnagar to Dankuni stretch) is one of the priorities of the Narendra Modi government.