Cabinet approves revised cost estimate of Rs81,459 crore for freight corridor projects

The Cabinet Committee on Economic Affairs (CCEA) has approved the revised cost estimate of Rs81,459 crore for the Eastern and Western Dedicated Freight Corridor (DFC) Projects, including land costs and financing plan.

The revised cost estimate of Rs81,459 crore comprises construction cost of Rs73,392 crore, including Rs26,674 crore for Eastern DFC and Rs46,178 crore for Western DFC.

The land acquisition cost is estimated to be Rs8,067 crore. This excludes the cost of the 534 km Sonnagar-Dankuni section proposed to be implemented through the Public Private Partnership (PPP) route.

Out of the total requirement of Rs81,459 crore for the Eastern and Western DFC project, Rs76,143 crore funding will be required during project construction, as the ministry of railways will have to pay interest of Rs5,316 crore to the finance ministry during construction the Western DFC, after the moratorium period of 10 years. Rs52,347 crore would flow from debt from JICA and World Bank.

Equity requirement from the ministry of railways (including land) for the project is Rs23,796 crore.

The Eastern and Western DFC passes through the states of Punjab, Haryana, Uttar Pradesh, Bihar, Jharkhand, West Bengal, Maharashtra, Gujarat and Rajasthan.

The Eastern and Western DFC project will add substantial transportation capacity, help in reducing unit cost of transportation and would provide efficient transportation services to benefit power houses, mines, ports, trade and industry and the container sector. It will benefit the environment as traffic from road will move to rail resulting in reduction in 457 million tonnes of CO2 over a 30 year period.

The Eastern DFC is expected to carry 153 million tonnes of traffic in 2021-22, which will increase to 251 million tonnes in 2036-37.

The 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 the Eastern DFC, the World Bank has committed a loan of $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, the loan of $1.1 billion was signed in December 2014.

For the third package covering the 447 km Dadri-Khurja-Ludhiana section, negotiations were finalised with World Bank for a loan of $650 million.

For the Western DFC, the commitment for the Japan International Cooperation Agency (JICA) loan is for 550 billion Japanese Yen and the first tranche loan agreements of 230 billion Japanese Yen for both Phase-I and Phase-II, have been signed.