World Bank signs $ 975 mn loan agreement for Eastern Dedicated Freight Corridor Project

NEW DELHI: The World Bank has signed a US$ 975 million loan agreement with the Indian government to set-up the Eastern Dedicated Freight Corridor that will help faster and more efficient movement of raw materials and finished goods between the Northern and Eastern parts of India. "The Indian Railways urgently needs to add freight routes to meet the growing freight traffic in India, which is projected to increase more than 7 percent annually. Dedicated freight corridors (DFC) will not only meet this growing freight demand, but also decongest the already saturated rail network and promote the shifting of freight transport from road to more efficient rail transport," said Venu Rajamony, Joint Secretary, Department of Economic Affairs, Ministry of Finance. "Augmenting its transport systems is a crucial element of India's trillion-dollar infrastructure agenda for the next Five-Year Plan (XIIth Plan) which starts in 2012. Since the 1990s, road transport has advanced more rapidly than the railways, and now accounts for about 65 percent of the freight market and 90 percent of the passenger market in India, and those shares are growing," he added. The Eastern Dedicated Freight Corridor Project will ease congestion choking the railway system and reduce travel-time for passenger trains on the arterial Ludhiana-Delhi-Mughal Sarai railway route. The corridor will add additional rail transport capacity, improve service quality and create higher freight capacity. World Bank financing will cover a route length of 1,130 kilometers (out of a total corridor length of 1,839 kilometers) and will be provided in three phases. The Project signed today will finance the first phase for the 343 kilometer section. "Implementing the DFC program will provide India the opportunity to create one of the world's largest freight operations, adopting proven international technologies and approaches which can progressively be extended to other important freight routes throughout the network," said Roberto Zagha, World Bank's Country Director in India. Unlike the existing rail network, which runs on a combination of diesel and electrical locomotives, the proposed DFC corridor will operate entirely through electric locomotives, thereby further reducing greenhouse gas emissions.