After receiving technological know-how from European biggies such as Alstom, Bombardier and ABB, Indian Railways is now all set to look East to shape up its ambitious dedicated freight corridor (DFC).
The railways will, in fact, officially rope in Japan for the project once governments of both the countries reiterate their co-operation and commitment for the construction of the corridor. The joint statement, which the two countries will release during Japanese prime minister Shinzo Abe?s visit that begins on Tuesday, will have a mention of this.
This is despite issues raised by Japan International Cooperation Agency (JICA) on cost factor and technology to be used in the freight corridor. In an interim report submitted to the railway ministry, JICA has estimated that the cost of constructing the two arms of the DFC is likely to cost over Rs 50,000 crore, almost twice the estimate of Rs 28,000 crore by the railways. In the report, company had also mentioned that they might not be able to provide technological know-how if the freight corridor uses diesel locomotives.
The Japanese government, through JICA, plans to fund 30% of the cost of the DFC. Much will, however, be dependent on the final report by JICA in October.
The funding is likely to be through the Japanese Bank for International Cooperation (JBIC) in the form of an aid or a soft loan.
The Japanese government will also provide some amount of technical support to the project.
Railway ministry officials said the interim report was more in the nature of internal clarifications, which are being addressed by the ministry. ?The joint statement by both the Prime Minister?s will in effect put the project on a firmer footing,? informs a Rail Bhawan official.
To further clear the air surrounding the project, the railways are also preparing a note for final approval of the freight corridor project by the Cabinet, which will be floated soon.
The ministry has already received an in-principle approval from the Cabinet Committee of Economic Affairs in February.
It had also got Cabinet clearance in August last year for setting up a special purpose vehicle for constructing the corridor. Rail Bhawan sources said with the final approval the project would be ready to take off soon as it will give a lot more operational flexibility.