Freight corridor loan in 2 months

The Indian Railways is likely  to ink the second engineering service loan contract for the Western stretch of the dedicated freight corridor project in about  two months.

This pact will pave the way for securing debt worth around Rs 17,000 crore for the project from the Japan Bank for International Co-operation (JBIC).  Officials from the Japan International Co-operation Agency (JICA), who arrived here last week, have initiated studies on two stretches on the corridor.

“The survey has been initiated on the stretch between the Jawaharlal Nehru Port Trust
(JNPT) in Mumbai and Baroda as well as Rewari and Delhi. After the completion of the survey in two months, an engineering services loan agreement will  be signed with JBIC,” a rail  ministry official said. The official did not disclosing the amount  of the loan.

Engineering service essentially means preparing the project for contracting. This entails
carrying out socio-economic  impact, setting up of design  parameters and preparing the bidding documents.

The JICA team, in its study, will make an estimate of the amount of the loan by assessing the requirements towards track-laying, making the terrain suitable, overall financial viability and impact on surroundings.

Japan has already committed Rs 130 crore for the engineering services loan for the 920 km stretch between Haryana and Vadodara. The agreement was signed last month.

The traffic on the corridor will mainly include containers from JNPT and Mumbai port in Maharashtra and ports of Pipavav, Mundra and Kandla in Gujarat destined for inland container depots at Tughlakabad, Dadri and Dandharikalan. Besides containers, commodities moving on the corridor include fertilisers, food grains, salt, coal, iron ore, steel and cement.

For the funding requirement of the project, a gross budgetary support of Rs 1,250 crore has been envisaged for the project. The Railways will also use its internal resources and domestic borrowings, if required.