The biggest railway upgrade project till date and railway minister Lalu Prasad?s personal prescription to turn around the fortune of the beleaguered Indian Railways ? the Dedicated Freight Corridor?remains caught up in a maze of funding troubles since it was first mentioned in his Budget speech of 2005-06.

To be constructed at a cost of Rs 37,218 crore, Lalu had hoped that the 3,284 kilometre-long dedicated freight corridor, with an eastern wing from Ludhiana to Sonenagar/Dankuni and a western arm from Mumbai to Tughlakabad, would allow heavy haul freight trains to run at 100 kilometre per hour for faster movement of goods.

According to the railway ministry officials, the main reason behind the delay is the lack of a cohesive funding plan. The funds are expected to flow in by early next year and the project will take off fully only under Lalu?s successor.

The ministry is still in discussions with the Japan Bank for International Cooperation (JBIC), the World Bank and the Asian Development Bank for loans. JBIC has promised to lend Rs 18,000 crore for constructing the 920-km stretch between Rewari and Vadodara on the western corridor, but the loan is expected to be secured by December this year. Meanwhile, the World Bank has given its in-principle approval for a loan of Rs 12,000 crore for the 730-km Mughalsarai-Khurja section. However, the funds are expected to materialise only by early next year.

Mainly, the delay was caused because of the railways opposing the high cost of loans being given by multi-lateral funding agencies and was instead planning to use its own internally generated funds for the project.

However, while it waits for the funds to materialise, officials point out that the time lag will now mean a significant cost escalation and the loans may need to be reworked yet again.

But in the four years since it?s been announced, the project has been inaugurated twice. Prime Minister Manmohan Singh laid the foundation stone of the eastern freight corridor in Ludhiana in September 2006 and in October that year launched the western freight corridor in Mumbai. Then once again, last week UPA chairperson Sonia Gandhi flagged off the construction of the eastern freight corridor from Rohtas.

The ministry also set up a special purpose vehicle, the Dedicated Freight Corridor Corporation of India Ltd in October 2006 to implement the construction.

However, despite the fanfare in the four years since it was first announced, the railway ministry has awarded only 105 kilometre-long stretch from New Ganjkhwaja near Mughalsarai to New Karwandia near Sonenagar. The stretch is being constructed by railways using its own finances, as it is yet to tie up the funding for the project.

• No progress on high-speed passenger trains

• New Delhi station modernisation delayed along with nearly 300 more stations

• Freight rejigged after the Budget, as many as 376 times in the last four years (by Dec ?08)

• The much-awaited budget hotels remain on paper

• Rs 50k-cr projects in different stages of completion when Lalu took over still pending