DFC seeks $800-million funding for eastern corridor

Dedicated Freight Corridor Corporation of India Ltd (DFCCIL) is negotiating with the World Bank for additional funding of $800 million (about Rs 3,700 crore) to develop a 430-km stretch in the Ludhiana-Khurja section under the eastern freight corridor.

DFCCIL has been set up under the railway ministry for the construction of eastern and western corridors for easy transportation of goods traffic.

The 1,806-km eastern arm of the dedicated freight corridor will connect Ludhiana in Punjab to Dankuni in West Bengal.

“A technical mission from the World Bank is coming on January 27 to examine the feasibility studies, environmental impact assessment and alignment reports. They will give a firm response after the evaluation,” a senior official at DFCCIL informed.

Initially, the construction of the stretch was to be funded by the Asian Development Bank (ADB). The Manila-headquartered bank has extended a loan of $500 million (about Rs 2,320 crore) to the railways for developing projects that are currently being executed by Rail Vikas Nigam Ltd (RVNL). ADB expressed an intention at redistributing the amount to include within its ambit the project for constructing the Ludhiana-Khurja segment.

“The ministry found the measure to be unviable and posed the section for additional funding from the World Bank,” the official added.

The World Bank has already committed $1.8 billion to $2 billion for developing the 730-km stretch between Mughalsarai and Khurja, the loan agreement for which is expected to be signed by July.

The fixed-cost rupee loan, which will take into account currency fluctuations, will be extended at an interest rate of 7 per cent. A feasibility study for the remaining portion of the corridor — between Sonnagar and Dankuni — is on. The final report will be submitted by September. Initial estimates indicate the entire corridor will be completed at a cost of Rs 24,000 crore.

As part of the World Bank funding programme, DFCCIL has appointed a consortium of consultants, including 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 stretch between Kanpur and Khurja.