The railways may have to review their financing plan for the dedicated freight corridor once again as the Japanese Bank for International Corporation (JIBC) is willing to provide loans only for building half of the project.the bank initially indicated its willingness to fund the construction of the western corridor based on certain conditions.
Railway sources told FE that JBIC has said it will fund only a 700-km-long segment from Rewari to Baroda. Post-Baroda, there are environmental issues because of which the JBIC has decided to withdraw its funds. Meanwhile, post-Rewari there are a number of tunnels to be constructed, which the bank feels, would be a tiresome task.
This would mean that of the Rs 25,000 crore estimated cost for the western corridor, the Japanese would provide only about Rs 14,000 crore. Railways would have to fund the rest on its own, along with shouldering the cost of constructing the Eastern corridor.
A Rail Bhawan official told FE, ?The cost of constructing the segment from Rewari to Baroda is estimated at about Rs 20,000 crore of which the JBIC would give 85%.? He, however, added that the bank might later decide to the remaining segment as well. The DFC covering about 2,762 km will have two arms?the eastern corridor of 1,279 km from Ludhiana to Sonenagar/Dankuni and the western corridor from Mumbai to Tughlakabad covering a distance of 1,483 km.
This would also imply that railways would have to dig deep into its pockets to be able to finance the construction of the corridors.