Dedicated Freight Corridor Corporation of India (DFCCIL) plans to run trains double the size envisaged earlier thus more than tripling the loading capacity and improving its operating margin to 15% from the below 10% from stretches that are exclusively meant for transport of goods. However, it will have to spend an extra R10,000 crore for the implementation of these stretches.
DFCCIL is a special purpose vehicle of Indian Railways creating two corridors?1,841-km eastern DFC from Dankuni in West Bengal to Ludhiana in Punjab and 1,500-km western DFC from Dadri in Uttar Pradesh to Jawaharlal Nehru Port in Maharasthtra ? for movement of freight at 100-km per hour by 2017.
The strategy encompasses running longer trains than earlier planned leading to higher loading and earning per journey. DFCCIL will also start operating parts of the two corridors as and when they are ready, compared to the earlier plan of operationalising the entire stretches in one go only after 2017. The corporation expects to commission a 66-km stretch of Mughalsarai-Sonnagar starting December 2013.
The plan is to run trains double the size envisaged earlier. This will increase the loading capacity of a train from 4,000 tonne currently to 13,000 tonne, increasing the earning capability. Longer trains will also reduce operational costs by 25%. ?The increase in earning potential and operational cost is expected to perk up operating margin to at least 15% from under 10% currently,? a senior official in DFCCIL with full details of the strategy told FE requesting anonymity.
However, the cost of development of the corridors will increase from R78,000 crore at present to R88,000 crore. ?Longer loops are required to facilitate running of longer trains. Additional cost will be incurred on items like rails, land, etc,? another official of the corporation said. DFCCIL has seen more than two cost escalations since the inception of the project. Originally, the project was pegged to cost close to R30,000 crore.
With the latest increase in cost estimates, the corporation will require to source more funds either from the cash-strapped Indian Railways or from the World Bank and Japan International Cooperation Agency (JICA). World Bank and JICA multilateral agencies are financing the eastern and western DFC, respectively, along with Indian Railways. The project is currently being funded in debt-equity ratio of 2:1, which means each rupee of equity has a debt of R2 against itself.
The new strategy was discussed at a meeting of the railway board last week and will be put
up before the Union Cabinet. ?We expect that Cabinet nod will be
given soon and we will award the first railway line-laying contract in the first quarter of 2012-13 giving due consideration to the infrastructure requirement to implement the new strategy,? the first official said.