WB to Lend $1.1 billion for Eastern Railway Freight Corridor

Agreement is second after loan of $975 million for 343km Khurja-Kanpur section of project approved by World Bank in 2011.The World Bank on Thursday signed an agreement to lend $1.1 billion to India to build the eastern dedicated railway freight corridor.

“The project will help increase the capacity of these freight-only lines by raising the axle-load limit from 22.9 to 25 tonnes and enable speeds of up to 100km per hour. It will also help develop the institutional capacity of the DFCCIL (Dedicated Freight Corridor Corp. of India Ltd) to build and maintain the DFC (dedicated freight corridor) infrastructure network,” the bank said in an emailed statement.

The agreement is the second after the first loan of $975 million for the 343km Khurja-Kanpur section for a project that was approved by the World Bank in May 2011. “90% of the 1,245ha land needed for the project has been acquired from 22,000 land owners with Rs.336 crore paid off as compensation, in addition to agreed resettlement and rehabilitation benefits,” the World Bank said.

The agreement was signed by Tarun Bajaj, joint secretary, department of economic affairs, M.K. Mittal, director, finance of DFCCIL, and Onno Ruhl, country director for World Bank in India. The eastern freight corridor is 1,839km long and extends from Ludhiana to Kolkata. India is building two freight corridors, in the east and the west, which will help the country increase its railway transportation capacity by building higher-speed dedicated freight corridors.

Currently, the rail routes that form a golden quadrilateral connecting Delhi, Mumbai, Chennai and Kolkata account for 16% of the railway network’s route length, but carry more than 60% of India’s total rail freight, according to the World Bank.

“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% annually. Dedicated freight corridors 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,” Ben Eijbergen, lead transport specialist and task team leader for the project from World Bank, said in a statement.

“We are determined to adhere to the scheduled completion target of eastern corridor by December 2019. 90% of land acquisition for Kanpur-Mughal Sarai section, for which the loan agreement is being signed today, has been completed, and the contract for civil works will also be finalized by January. With the finalization of these contracts, the work will be progressing in two-thirds of the total length of eastern corridor,” Adesh Sharma, managing director of DFCCIL, said in the statement.