By Afreen Hashmi, National Law University, Jodhpur.

The Cabinet Committee on Economic Affairs recently approved a revised cost estimate for the much delayed ambitious project of building the eastern and western dedicated freight corridor (DFC). Dedicated freight lines are rail lines whose planned use is restricted to freight trains only. A dedicated rail freight network would consist of an integral network of such lines, either newly constructed lines or existing lines converted to dedicated freight use, with adaptation where necessary. At Rs.81,459 crore, the new figure of constructing the DFC is more than double of the originally estimated Rs.28,181 crore.

A substantial portion of the revised cost will be met by way of debt from multilateral institutions such as the Japan International Cooperation Agency and the World Bank. The equity requirement of the Railways will be around Rs.23,796 crore. Dedicated Freight Corridor Corporation of India Ltd., the special purpose vehicle set up by the Railways to implement the project, is keen to complete it by 2017-18. Once the twin-corridor system is in place, it will transform the very profile of the Railways. A host of positive outcomes, such as reduction in transportation costs and stepped-up commercial activity, benefiting a range of core industries, could flow from it. This could in turn have a multiplier effect on the economy.


When India became independent from the British rule in 1947, it inherited a fairly large network of rail transport and a modest road network. The Indian Railways had a share of almost 90% in the inland movement of goods and there was significant investment in rail infrastructure initially. However, this was not sustained and, as a result, growth of freight movement by rail slowed down during the 1960s and 1970s and the share of road transport in the total freight traffic started increasing at a faster rate. The share of Coastal Shipping, Inland Waterways and Airways in India’s freight transport sector has traditionally been quite small. However, there has been impressive growth in the quantum of freight carried by these modes during the last decade. Another significant recent development has been the use of pipelines for transport of petroleum products and natural gas

India’s economy has seen unprecedented growth during the last decade. While this has created a great deal of opportunities, it has also resulted in many challenges especially for infrastructure required to sustain the rate of growth. Transport is viewed as one of the critical infrastructures for the economy. At the same time, it is also a fact that the existing transport infrastructure has not kept pace with the growth in demand. The highway development projects have slowed down and the railway networks are highly congested. Lower average speed, unplanned halting of trains and outdated technologies reduce the operational efficiency of the system. India’s infrastructure is not adequately equipped to meet rapidly rising freight traffic, changing consumption patterns and increasing number of production centres.

There is increasing recognition among policymakers in India that transport infrastructure could become a serious bottleneck for future economic growth. The idea of developing the dedicated rail corridors for freight movement was conceived in 2005 in a joint declaration by the Government of India and Japan. The 1,839-km-long eastern corridor will connect Ludhiana in Punjab with Dankuni in West Bengal. It will have two components, a double-track section and a single-track segment, both electrified. It will cut across six States. The eastern corridor will cater to traffic streams including coal, finished steel, cement and fertilizer. The western corridor will cover nearly 1,500 km, connecting the Jawaharlal Nehru Port near Mumbai with Dadri, and passing through States such as Haryana, Rajasthan, Gujarat and Maharashtra.

But there are several hurdles in the way of achieving this. Like any other infrastructure project, there are stretches of land that have been difficult to acquire for the government. For example, the western corridor of DFC was to pass through Panvel and then proceed towards Jawaharlal Nehru Port Trust (JNPT). But acquiring land for DFC has been difficult at Panvel where several other projects are also converging like the upcoming airport at Navi Mumbai, suburban sections on the Virar-Vaasi-Diva-Panvel line and, construction of the Panvel Coaching complex.

The huge cost overruns owing to the time lapse tell their own tale, and reflect the massive challenge facing policy planners in pushing through a project of this size and magnitude that has inter-State implications. From a slow decision making process to roadblocks to land acquisition, there are problems aplenty in the way ahead for the project. Prevarication on the decision-making front will hurt the viability of even soundly conceived projects. The Narendra Modi led government should ensure that the twin-corridor project goes through without any further delay. The key to doing so will lie in taking along the States concerned.