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Govt plans to lease out dedicated freight corridor tracks to private firms

To rope in telecom companies and make use of optic fibre network

indian railways, linde, apl, container, goods, transport, dedicated freight corridor, privatisation
This will be part of the upcoming measures that a high-powered committee of secretaries is working on for improving the Indian Railways.
Shine Jacob New Delhi
3 min read Last Updated : Jul 22 2020 | 6:10 AM IST
The Centre is working on a comprehensive plan for asset monetisation of the dedicated freight corridors (DFCs) by leasing out rail tracks to private players to run trains and rope in existing telecom players to use its optic fibre network, among other measures.

This will be part of the upcoming measures that a high-powered committee of secretaries is working on for improving the Indian Railways. 

The committee is entitled to fast-track innovative financing for its projects, corporatise production units and monetise existing rail infrastructure and DFC assets. According to the railways, both Eastern Dedicated Freight Corridor (EDFC) and Western Dedicated Freight Corridor (WDFC) are expected to be commissioned by 2021, except the Sonnagar to Dankuni stretch in EDFC.  

“Clarity on the monetisation of assets can be worked out after the project becomes operational. The revenue that can be earned through asset monetisation will be assessed internally and we may also look to appoint a consultant, if needed. By March 2021, a detailed framework for this will be in place,” said Anurag Sachan, managing director (MD) of the Dedicated Freight Corridor Corporation (DFCCIL). 

According to sources, the plans include allowing private players to operate their trains on DFC tracks and telecom players to use its optic fibre network. This would ensure that over 2,800 kilometres (kms) of the laid optic fibre infrastructure is available for existing telecom players. For this, DFCCIL has already signed a memorandum of understanding with another railways subsidiary Railtel. In addition, private investment is expected to come in multi-model logistic hubs and rail sidings that DFCCIL is set to come up with. The railways has already discussed this master plan with an empowered group of secretaries (EGoS). This group is led by NITI Aayog chief executive officer (CEO) Amitabh Kant and members include Railway Board chairman and secretary of the department of economic affairs, among others.

“Monetisation of these assets will only help in faster repayment of loans that we have taken from multi-lateral agencies,” said a railways official. The Western DFC is being partly funded through a loan of Rs 38,722 crore from Japan International Cooperation Agency (JICA). Its project cost is Rs 51,101 crore. 

The remaining part of the project cost for both the corridors will be funded through gross budgetary support from the Centre as equity contribution. On the Eastern DFC, the 1,192-km Ludhiana (Punjab) to Mughalsarai (Uttar Pradesh) stretch is being funded by World Bank. Out of Rs 30,358 crore (project cost), the World Bank is giving Rs 13,625 crore for the project.

The empowered group of secretaries was set up last year to mainly speed up the redevelopment of 50 railway stations and for speedy implementation of private trains on Indian tracks. Now, the terms of reference of this committee has expanded, looking into the overall revamp of the railway infrastructure in the country.

Topics :Indian RailwaysDedicated Freight Corridorprivatisation

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