Dedicated freight corridor gets back on track

Written by Rajat Arora | New Delhi | Updated: Nov 22 2013, 10:22am hrs
After a six-month delay, the western dedicated freight corridor is back on track with Japanese infrastructure giants Sojitz and Mitsui placing their price bids for the 322-km Iqbalgarh-Vadodara route, reports Rajat Arora in New Delhi. Due to lack of interest by Japanese firms, the bidding for the R3,500-crore route was pushed back several times by the Indian Railways. Three Japanese firms Sojitz, Mitsui and Marubeni were qualified for participation in the bidding but didn't initially come forward to put in bids. Indian Railways was apprehensive that a no-bid or one-bid scenario would defer the implementation of the project, funded by Japan, by one and a half years. A delegation of Indian Railways led by the chairman, Railway Board, had gone to Japan to persuade the Japanese government to ask the companies to participate in the tender of the civil contract or relax Tokyo's loan condition which says the lead partner has to be from Japan, a Railway Board official said.

As per the Japan International Cooperation Agency (JICA) loan contract, the funding agency of the 1,483-km freight corridor, the lead partner for the project has to be from Japan and 30% of materials should be sourced from Japanese companies.

The project is very much on track and we intend to award by the contract by the end of this financial year,Dedicated Freight Corridor Corporation (DFCC) managing director RK Gupta told FE.

Marubeni which had also qualified , however stayed away from the bidding as the company wasnt very comfortable with its Indian partner, Tata Projects.

The western corridor, a part of Indias ambitious DFC project, connects Dadri near New Delhi to Mumbai, and passes through Haryana, Rajasthan, Gujarat and Maharashtra.

A few months ago, Sojitz, which bid along with Larsen & Toubro, was selected for the contract to build the 640-km Rewari-Palanpur stretch on the western segment. JICA has committed 677 billion yen as a low-cost loan to be repaid over 40 years for the western corridor.

The railways has acquired 91% of the 11,000-hectare required for the 3,300-km DFC, entailing a total investment of over Rs 90,000 crore.