Japan to get interest forever on low-cost funds extended to the Railways & Freight Corridors

NEW DELHI: Japan will get interest repayment in perpetuity or forever for the low-cost loan that it extended to India for building the western dedicated rail freight corridor. The interest will be about 2,800 crore every year. This is similar to the dividend that the Indian Railways pays to the Consolidated Fund of India, which was also termed “interest in perpetuity”.

The revenue of Dedicated Freight Corridor Corporation of India Ltd (DFCCIL), will be in the form of “track access charges”, which it will receive from the Railways. Track access charges are being finalised by the Railways and the national carrier is expected to earn revenue by moving trains carrying containers, fertiliser, and other goods on the track, which are built for carrying higher load and longer freight trains.

For the 190-km stretch that was commissioned on August 15, the Railways’ container train operator ran a double stacked train on the track. As freight corridor gets operationalised, the revenue and profitability of Railways is expected to sharply increase, helping it attract more freight traffic.

Hiring plans

DFFCIL is in the process of hiring 1,500 technical staff this year. The organisation is estimated to have a permanent staff strength of 6,200 by 2020, when present set of corridors will be completed. The staff cost of freight corridor stretches is included in the overall project cost of 81,000 crore.

“We will now approach the Railway Design and Standards Organisation (RDSO) to allow running of higher speed double-stack container trains,” Anurag Sachan, Managing Director, DFCCIL, said at a conference here on Thursday.

DFCCIL is exploring another corridor between Kharagpur-Vijayawada and is expected to propose it in the next Budget. The cost of the project is expected to be 40,000 crore, which will be funded through equity by the Railways and loan from multilateral agencies, including Japanese funding agency JICA or World Bank.