The Asian Development Bank (ADB) is entirely out of the picture and in its place has come the Japan International Cooperation Agency (JICA) for partly funding the eastern corridor of the railways ambitious Dedicated Freight Corridor Project. JICA, incidentally, is the main fund provider for the western corridor of the project too.
The dedicated freight corridor project, the railways’ most ambitious project ever, is expected to provide a huge fillip to the movement of freight traffic along in the country. The need for this project was also felt in view of the growing demand for coal movement owing to more demand for power, infrastructure construction that’s booming and growing international trade.
The railways had been exploring funding from the ADB for the eastern corridor whose cost is currently pitched at Rs 23,500 crores. But this multilateral agency has been replaced by JICA which is already providing 80 to 85 per cent of the funding for the western corridor whose estimated cost is Rs 26,124 crores.
These figures, which are available in the Delivery Monitoring Unit’s report of May 2010, are of course at variance with what the Dedicated Freight Corridor Corporation has given as the estimated cost of the project.
According to railway sources, about 67 per cent of the funding for the 1,279 km long eastern corridor between Ludhiana in Punjab and Dankuni in West Bengal will come from the World Bank. Assistance from this multilateral agency is expected to be to the tune of $2.4 billion (Rs 12,000 crores).
Sources further said that World Bank funding is in an advanced stage of negotiations and the railways is hopeful that it will be able to sign the first loan agreement of $850 million (Rs 4,750 crores) in October this year. This amount will be for the Khurja-Kanpur section of the eastern corridor.
The western corridor from the Jawaharlal Nehru Port Trust (JNPT) in Mumbai to Tughlaqabad and Dadri is 1,484 km long.
The loan agreement for the first tranche of Rs 4,500 crores was signed in March this year for the 950 km long Phase-I Rewari-Vadodara stretch.