A special purpose vehicle to facilitate the development of Rs 22,000-crore dedicated freight corridor (DFC) project has been approved by the Group of Ministers (GoM). The SPV will be a wholly-owned subsidiary of the railway ministry. The SPV will be only an infrastructure provider and the operations of DFC will be looked after by the Railways.
The second stakeholder will come into the picture later. The GoM have recommended finding a suitable public sector company as the second partner as there will be no private players. PSUs like coal companies and port trusts will be eligible to become part of the SPV, Shri Prakash, Advisor (Infrastructure), Railway Board, informed.
Private players can, however, participate in the DFC project through construction and maintenance of railway tracks. A concession agreement would be signed between the SPV and private players. "As of now private sector companies do not have the capability to handle such a massive project," said Shri Prakash. "Maybe, 10-12 years down the line, they can also be roped in."
The Japan International Cooperation Agency will submit its feasibility report on the project by 2007 after which the Japan Bank for International Cooperation will decide whether or not to fund the project. "The debt-equity ratio will be 2:1. The debt component will be raised from the market," said Shri Prakash. RITES is due to submit the DPR by October 2006.
After commissioning, DFC will reduce the transit time between Delhi to Mumbai from 60 to 36 hours. It will also reduce the cost of operation.
Phase-I of the Western Corridor will start from Jawaharlal Nehru Port connecting Baroda, Ahmedabad, Palanpur, Jaipur and Rewari to Tughlakabad and Dadri. The Eastern Corridor project will start from Ludhiana to Sonnagar via Ambala, Saharanpur, Khurja and Allahabad. The total route km for the DFC is 2,700 km.