DFCC to award Rs.26000 Crore worth of Contracts in the current fiscal 2015-16

New Delhi: Dedicated Freight Corridor Corporation (DFCC), the Indian Railways’ arm implementing the ambitious freight corridor project, is planning to award contracts worth Rs 26,000 crore in the current financial year (2015-16) in a bid to speed up work and meet the deadline for commissioning the Rs 81,000 crore project.

“In 2015-16 we want to finalise all the contracts as the entire funding for the project has been tied up. Five contracts worth Rs 8,000 crore for the Eastern Dedicated Freight Corridor (EDFC) and nine contracts worth Rs 18,000 crore for the Western Dedicated Freight Corridor (WDFC) are to be awarded this fiscal,” DFCC Managing Director Adesh Sharma told.

For the construction of the EDFC, contracts worth Rs 4,000 crore were awarded in 2013 followed by another Rs 5,000 crore contract last year. “The additional five contracts this year would be for signaling and telecommunication, electrification and civil construction. Similarly, for WDFC, in order to meet the deadline we will award the nine contracts for electrification, signaling, track works and civil works,” Sharma said.

For the western arm of the project, DFCC had awarded a Rs 7,000 crore contract for the 650-kilometre Rewari and Palanpur section in August 2013. This was followed by a Rs 4,000 crore contract placed last year for electrification between the Rewari and Vadodara stretch. Sharma said the process of awarding contracts has been in sync with the pace of securing funds from multilateral agencies.

The Golden Quadrilateral linking Delhi, Mumbai, Chennai and Howrah – and its two diagonals Delhi-Chennai and Mumbai-Howrah – accounts for only 18% of the Indian Railways’ network but carries more than 58% of revenue-earning freight traffic. The existing routes of Howrah-Delhi on the Eastern Corridor and Mumbai-Delhi on the Western corridor are highly saturated creating the need for dedicated routes.

DFCC is currently constructing the 3,350-kilometre long freight corridor project including 1,800 Km as its Eastern arm between Ludhiana and Dankuni in West Bengal. The Eastern DFC comprises three phases — Ludhiana to Mughalsarai, Mughalsarai to Sonnagar and Sonnagar to Dankuni. The Western DFC will come up between Dadri in Uttar Pradesh to Jawaharlal Nehru Port (JNPT) in Mumbai. The project, when commissioned in 2019, would take up more than 70% of the Indian Railways freight traffic on to its faster, longer and heavier trains.

The Eastern DFC accounts for around 40% of the total project cost. Phase I of the project between Khurja and Mughalsarai is being funded through 66% debt from World Bank and the rest as equity from the rail ministry. The Phase II corridor between Mughalsarai and Sonnagar is being funded entirely through the government equity while the third phase between Sonnagar and Dankuni is to be developed on PPP mode.

The World Bank is providing loan of $2.725 billion for funding the Ludhiana-Khurja-Kanpur-Mughalsarai corridor in three phases. The first phase loan of $975 million was approved for the Khurja-Kanpur section in 2011 followed by another $1.1 billion loan for Kanpur-Mughalsarai section signed in December 2014. Negotiations are currently on for the remaining $650 million funding.

The debt for the Western DFC is sourced from Japan International Cooperation Agency (JICA), the Japanese government’s funding arm. Japan is providing a Special Terms of Economic Partnership (STEP) loan of 677 billion yen extended on soft terms for forty years with a moratorium of 10 years. The first tranche of the loan for 90.2 billion yen for construction between Rewari and Vadodara and additional 266 billion yen for funding Phase II (Vadodara-JNPT) of the Corridor has been signed.