Japanese firms lack of interest delays western freight corridor

Written by Rajat Arora | New Delhi | Updated: Nov 8 2013, 10:55am hrs
Lack of interest from Japanese infrastructure companies in building the 322-km stretch of western freight corridor of Indian Railways has delayed the project by around six months, and if the logjam continues, the bidding of the remaining route of the 1,483-km corridor could also get delayed.

The bidding process, which was to begin in June this year, has been pushed four times by Indian Railways as Japanese companies, which were expected to take up the civil contracts with request for proposal (RFP) of the 322-km-long Iqbalgarh-Vadodara route, kept off.

Three Japanese companies Sojitz, Mitsui and Marubeni qualified for participation in the bidding but didn't come forward to put in their price bids. The RFP is now expected to begin from November 15.

The issue which was expected to be resolved after Railway Board chairman Arunendra Kumars visit to Japan in September is yet to get back on track.

We want more bidders for the project. One-bid scenario is not what we are looking for. There's a difference between the working of Indian and Japanese companies. In Japan, they are fine with the nomination system or one-bid scenario. But in India we always look for more bids. We have spoken to the Japan government and they have assured us that they would convince more companies to participate, a senior railway board official said.

As per the Japan International Cooperation Agency (JICA) loan contract, the lead partner for the project has to be from Japan and 30% of materials should be sourced from Japanese companies.

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 of the dedicated freight corridor (DFC). JICA has committed 677 billion yen as a low-cost loan to be repaid over 40 years for the western corridor.

The western corridor, a part of India's ambitious dedicated freight corridor (DFC) projects, connects Dadri, near New Delhi, to Mumbai, and passes through Haryana, Rajasthan, Gujarat and Maharashtra.

The railways has acquired 91% of the 11,000-hectare required for the 3,300-km DFC, entailing a total investment of over R90,000 crore.