CCEA okays revised cost estimate for freight corridor project

New Delhi: The Cabinet Committee on Economic Affairs today approved the revised cost estimate of Rs 81,459 crore for the Eastern and Western Dedicated Freight Corridor (DFC) Project, including land costs and financing plan. DFC aims to spur economic growth and is being created for the exclusive movement of freight.[caption id=“attachment_1418969” align=“alignleft” width=“380”]  Representational image. Agencies.[/caption] Cleared by the Prime Minister Narendra Modi-headed CCEA, the revised cost estimate comprises construction cost of Rs 73,392 crore. While the 1,839-km-long Eastern DFC from Ludhiana to Dankuni is estimated to cost Rs 26,674 crore, the construction of the 1,499-km-long Western DFC from Dadri to Jawaharlal Nehru Port will involve an expenditure of Rs 46,178 crore. Earlier, CCEA in March, 2008, had given its approval for implementation of the Eastern and Western DFC projects with an expenditure of over Rs 28,181 crore having so far been incurred on the same. The approval for the revised cost estimate was essential for proceeding with project implementation and entering into commitments. The land acquisition cost for the project will be Rs 8,067 crore. This excludes the cost of the 534-km Sonnagar-Dankuni section proposed to be implemented through the Public-Private Partnership (PPP) route. Of the total requirement of Rs 81,459 crore for DFC, Rs 76,143 crore is needed during project construction, as interest during construction of Rs 5,316 crore for the Western DFC is needed to be paid by rail ministry to finance ministry after a moratorium period of 10 years. For DFC, Rs 52,347 crore would flow as debt from Japan International Cooperation Agency (JICA) and World Bank. Equity requirement from railway ministry (including land) for the project is Rs 23,796 crore. The entire Western Corridor is being funded by JICA while the Eastern Corridor from Mughalsarai to Ludhiana is being funded by World Bank. Together, the Eastern and Western DFC would pass through Punjab, Haryana, Uttar Pradesh, Bihar, Jharkhand, West Bengal, Maharashtra, Gujarat and Rajasthan. The DFC project will add substantial transportation capacity, help reduce the unit cost of transportation and provide efficient transportation services to benefit power companies, mines, ports, trade and industry and the container sector. The DFC project would also benefit the environment as traffic from road will move to rail resulting in reduction of 457 million tonnes of CO2 emission over a 30-year period. The Eastern DFC is expected to carry 153 million tonne (MT) of traffic in 2021-22, which will increase to 251 MT by 2036-37. Western DFC is expected to carry 161 million tonnes of traffic in 2021-22, which will increase to 284 million tonnes in 2036-37. For Eastern DFC, the World Bank loan is for $2.725 billion and the loan agreement for $975 million to cover the first package of 343-km from Khurja to Kanpur was signed in October, 2011. For the second package of 402-km from Kanpur to Mughalsarai, a loan of $1,100 million was signed in December last year. For the third package covering the 447-km Dadri-Khurja-Ludhiana section, negotiations were finalised with World Bank for a loan of $650 million. The JICA loan is for 550 billion Japanese Yen and the first tranche loan agreement for 230 billion Japanese Yen for both Phase-I and Phase-II of the Western DFC have been signed. The project has achieved significant progress as over 84 percent of land has been acquired with land compensation award of over Rs 6,900 crore declared according to the provisions of the Railway Amendment Act, 2008. Civil construction contracts and other contracts for about 1,526-km on the two corridors and 54 bridges on the Western DFC have been awarded at a total value of over Rs 20,000 crore. The contracts are being awarded on design-build lump-sum basis. The works for signalling and electrification packages and the balance civil works are also at an advanced stage of tendering. The completion of the Eastern and Western DFC is targeted in phases from 2017 to 2019. PTI