Rail Budget 2016: Govt plans 3 more freight corridors through PPP

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New Delhi | Published: February 26, 2016 12:43:10 AM

Suresh Prabhu also proposes two rail corridors for passengers in Mumbai

Making a commitment that the much talked-about eastern (Delhi-Kolkata) and western (Delhi-Mumbai) dedicated freight corridors would be ready by 2019, railway minister Suresh Prabhu unveiled plans to lay three more such corridors through public -private partnership (PPP) model. In addition, Prabhu, who presented his second Budget on Thursday, also proposed two rail corridors for passengers in Mumbai.

“Shifting of goods trains from existing tracks to the new corridors would also release a great deal of capacity which would help upscale the nature of passenger services on these trunk routes. It is proposed to prepare a blueprint for making full use of this huge new capacity no sooner than it is commissioned,” Prabhu said in his Budget speech.

The 62-year-old minister announced three new freight corridors: North-South connecting Delhi to Chennai, East-West connecting Kharagpur to Mumbai and East Coast connecting Kharagpur to Vijayawada. Prabhu said that these three projects would be implemented on high priority to ensure structuring, award and implementation in a time-bound manner through ‘innovative financing mechanisms.’ The three corridors are likely to cost more than $50 billion, say industry watchers.

“For the freight corridors to actually deliver benefits, the states will have to earmark budgetary outlays in their respective budgets for upgrading last mile connectivity in terms of connecting roads from identified industrial parks to railway dispatch points. This continues to be a major problem in many of the states,” said Arindam Guha, senior director at Deloitte in India.

Given the emphasis on rapid expansion of freight business, according to Prabhu, it is essential to build more dedicated freight corridors for increased traffic with consequent benefits for the economy and environment.

Of the Rs 81,459 crore total cost for both the eastern and western corridors, Rs 73,392 is the cost of construction and the remaining is the cost of land. The land cost is being borne by the Indian Railways and the land acquired will be in the name of railways. The total land requirement for both the corridors is 11,550 hectares, and so far 83% have been acquired, FE reported recently.

Informing Parliament on the freight corridors, Prabhu claimed that since he assumed office, contracts worth Rs 24,000 crore have been awarded against Rs 13,000 crore worth of contracts in the last 6 years. In FY16, all the contracts for civil engineering works would have been awarded, he said.

“The Kharagpur Mumbai freight corridor would help streamline industrial connectivity for states like Jharkhand, Madhya Pradesh and Chhattisgarh. With severe capacity and draft constraints in most of the ports in the upper part of the east coast, large industrial units in these states typically use JNPT for imports and exports,” said Guha of Deloitte.

Meanwhile, Prabhu also proposed two new rail corridors — an elevated on from Churchgate to Virar and CST to Panvel —for the Mumbai’ suburban network. A special purpose vehicle will be formed for the proposed bullet train project along the Ahmedabad-Mumbai high-speed rail corridor.

A high speed passenger corridor from Ahmedabad to Mumbai is being undertaken with assistance from the Government of Japan.

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