Negotiating Rs 12,000-crore loan with Japanese agency
Government-run Dedicated Freight Corridor Corporation of India Ltd (DFCCIL) is negotiating with the Japanese International Cooperation Agency (JICA) for a loan of another Rs 12,000 crore to construct 563 km of the western arm of the Dedicated Freight Corridor (DFC).
“We are in talks with JICA to fund the remaining portion of the western DFC project. JICA has given an in-principle approval for the loan, and we expect to secure the funding by March 2011,” said DFCCIL Managing Director V K Kaul.
The 1,483-km western corridor project will connect the Jawaharlal Nehru Port in Navi Mumbai and Tughlakabad, Delhi.
On September 17, the government had approved a proposal for availing Japanese Overseas Development Assistance (ODA) of Rs 17,700 crore at an interest rate of 0.2 per cent for setting up a 920-km corridor between Rewari (Haryana) and Vadodara (Gujarat). The funding will be initiated with an engineering services loan of Rs 130 crore. RFP (Request for Proposal) for engineering consultancy has been formulated and is awaiting clearance from the railway ministry and JICA.
Kaul added: “It will take around a year to finalise the Japanese ODA. Then we will invite international bids for starting construction work on the western corridor.”
Meanwhile, the World Bank has committed lending Rs 10,000 crore for the 730-km Mughalsarai-Khurja section of the eastern freight corridor. The Asian Development Bank has shown interest in lending around Rs 7,000 crore for the 430-km stretch between Khurja and Ludhiana. Both these stretches fall on the 1,806-km eastern corridor between Ludhiana (Punjab) and Dankuni (West Bengal).
The funding from the World Bank is likely to be tied up by July 2010, while that from ADB by December next year.
As part of the World Bank funding programme, DFCCIL has appointed a consortium of consultants which includes Parsons Brinckerhoff India, Halcrow Consulting India, Lea Associates South Asia Ltd and Wilbursmith Associates Ltd for system design, finalisation of bid documents and supervision of construction of the 300-km Kanpur-Khurja section on the eastern corridor.
“The preparation of bid document and finalisation of specifications is in progress for sections planned for funding by the World Bank. As soon as these are cleared by World Bank, the RFQ will be floated,” a DFCCIL official said.
Kaul informed: “At current prices, the total cost of constructing the eastern and western Dedicated Freight Corridors is estimated at Rs 42,231 crore, excluding statutory taxes and levies which would add 8-10 per cent. The cost on completion would be about Rs 60,000 crore.” The debt-equity ratio of the project has been decided at 2:1. The railways will infuse equity. The project is expected to be commissioned by 2017-2018.
The DFCs are expected to augment the capacity of Indian Railways to handle increasing freight traffic in the coming years. These would enable freight trains to run at a speed of 80-90 km per hour, almost three times the present speed of 25-30 km per hour.
