One step forward, two steps backward may just have become the railway ministry’s catchphrase as it tries to solve the over Rs 35,000-crore riddle of funding its ambitious dedicated freight corridor project (DFC).
The Japanese Bank for International Cooperation (JBIC) has informed the railway ministry that it is willing to partly fund only the Western arm of the DFC. Concerned about the lack of funding for the Eastern corridor from Delhi to Kolkatta, Rail Bhawan officials are now trying to woo other investors and are discussing alternate sources of financing.
The ministry is now planning to initiate talks with multilateral funding agencies such as the World Bank and is also re-visiting the public private partnership route to finance construction of the 1,309 kilometre long corridor estimated to cost about Rs 17,280 crore.
Sources said the ministry is also looking at increased market borrowings through the Indian Railways Finance Corporation (IRFC) and estimating how much of its internally generated resources can be pledged for the corridor.
Sources said the Japanese government is keen to fund only the Western corridor as it would coincide with its other interest- the Delhi Mumbai Industrial Corridor- which is expected to house a number of large Japanese projects.
The 1,468 kilometre long Western corridor from Delhi to Mumbai is expected to cost about Rs 24,810 crore, including the cost of locomotives and an inland container depot as well as some amount of cost escalation. Railways have also agreed to have electric traction on the corridor. The JBIC has pledged to provide about Rs 18,000 crore for the project provided the success of a few trial runs.
The pressure on railways to finalise a funding plan is mounting with both the Planning commission and the finance ministry expressing concern about the two-year long delay in doing so. They are of the view that the DFC may have a large cost and time over runs if the funding plan and construction do not begin soon.