Game Changer in Transport

Status of the DFC project

With an investment of over Rs 800 billion, the Dedicated Freight Corridor (DFC) project is one of the biggest ongoing infrastructure projects in the country. The project was conceived in 2004-05, and a special purpose vehicle (SPV), Dedicated Freight Corridor Corporation of India Limited (DFCCIL), was set up in October 2006 to undertake the project. The Ministry of Railways (MoR) has a 100 per cent equity stake in the SPV.

Under this project, Indian Railways (IR) has proposed the construction of six high-capacity corridors along the Golden Quadrilateral and its diagonals. Phase I comprises two corridors – the Western DFC and the Eastern DFC – which were approved to be taken up in 2008. DFCCIL will manage train operations and infrastructure maintenance on the DFC and have its own stations and control centres.

Phase I of the project is estimated to be completed at a cost of Rs 814.59 billion, of which Rs 733.92 billion is the cost of construction and the remaining is the cost of land. The entire capital expenditure will be financed by the MoR through debt and equity in the  ratio 3:1. Debt will be financed through loans from multilateral agencies – the World Bank ($2.725 billion) and the Japan International Cooperation Agency (JICA) ($7.745 billion).

Four new corridors have been identified under the DFC project – the East-West Corridor (2,328 km), the North-South Corridor (2,327 km), the East Coast Corridor (1,116 km) and the Southern Corridor (890 km). These corridors will be constructed at a total cost of $65.8 billon.

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Key developments during 2014-15 and 2015-16 (up to March 2016)

  • Loan amount of $650 million for Eastern DFC Phase III (Khurja-Ludhiana) was sanctioned by the World Bank in June 2015.
  • Funding arrangement for the entire Western DFC was tied up with JICA.
  • Cabinet Committee on Economic Affairs approved the revised cost estimate of
  • Rs 814.59 billion for both corridors.
  • Draft preliminary engineering and traffic survey (PETS) reports for the North-South Corridor and East-West Corridor were submitted to the Railway Board in May 2015, and final PETS reports were submitted by RITES Limited in August 2015.
  • Draft PETS report for East-Coast Corridor was submitted by RITES in August 2015.
  • Work on field data collection for the Southern Corridor is in progress.
  • Detailed project report has been finalised for the Sonnagar-Dankuni section (540 km) of the Eastern DFC.
  • As of November 2015, an expenditure of Rs 150.62 billion, including land, has been incurred on both the corridors. Work has begun on the Khurja-Kanpur (Eastern Corridor) and Rewari-Palanpur (Western Corridor) sections and is in progress on the Kanpur-Mughalsarai (Eastern Corridor) and Vadodara-Vaitarna (Western Corridor) sections.
  • DFCCIL signed the biggest signalling and telecommunications contract worth Rs 23.9 billion for the design and construction of signalling and telecom works and a train protection and warning system on the Western DFC.
  • As of December 2015, 87 per cent of the land has been acquired for both the corridors (excluding that for the Sonnagar-Dankuni section). Of the 5,550 hectares required for the Eastern DFC, 4,165 hectares has been acquired. For the Western DFC, of the total land requirement of 6,000 hectares, 5,504 hectares has been acquired.
  • Overall, 83.7 per cent compensation (Rs 75.62 billion) has been paid out.
  • In January 2016, the Larsen & Toubro (L&T) and Sojitz Corporation (Japan) consortium received a design-build contract worth
  • Rs 12.13 billion for electrification works on the 422 km section of the Western DFC from Vadodara in Gujarat to Jawaharlal Nehru Port Trust (JNPT) in Mumbai.
  • Contracts worth Rs 240 billion have been awarded by DFCCIL as of February 2016, substantially more than the total contracts awarded during the past six years (around Rs 130 billion). As a result, civil and track works are progressing on 65 per cent of the corridor length (1,830 km) and system works on 50 per cent of the length (1,360 km).
  • Recently, in March 2016, Gayatri Projects Limited forayed into the railway sector by winning a Rs 47.44 billion contract for designing and building the Iqbalgarh-Vadodara section of the Western DFC in a consortium with Sojitz Corporation and L&T.
  • In March 2016, JICA signed an agreement with the Government of India to provide JPY 103.66 billion (the third tranche of the loan) for the DFC Project Phase 1.

The DFC project has obtained environmental and wildlife clearances as well as other key statutory approvals. The 56 km track between Sasaram and Durgawati on the Eastern DFC will be commissioned shortly. The Eastern and Western corridors will become operational in a phased manner by 2019. The DFC will provide faster and longer container trains, and establish connectivity to major ports in Gujarat, to JNPT in Maharashtra as well as to new and upcoming ports. A game changer in transport logistics, the freight corridors will aim to increase the railways’ share in the transport sector from the current 30 per cent to 45 per cent, thereby catalysing development of the Delhi-Mumbai and Amritsar-Kolkata industrial corridors and logistics parks.

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