The Hindu : Business : Differences over outlay on freight corridor

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Monday, Oct 15, 2007
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Differences over outlay on freight corridor

Mumbai-New Delhi and Ludhiana-Son Nagar network planned

The Railways would need to acquire more than 8,800 hectares for constructing the proposed 2,783-km-long corridor.

FILE PHOTO

ELUDES CONSENSUS: Japan has questioned the cost estimates of the dedicated freight corridor project.

Differences have arisen between India and Japan over one of the biggest infrastructure projects being undertaken by the railways. The Dedicated Freight Corridor (DFC) project would be an adjunct to the Delhi Mumbai Industrial Corridor (DMIC) but Japan has questioned its cost estimates thus putting a question mark over the fate of both the initiatives, said highly placed railway sources. In addition, the views of both sides are at variance about the technology to be used for the DFC as well as the rehabilitation and compensation plan for the displaced.

Sources said the Prime Minister's Office has intervened in the matter and so has the Finance Ministry to resolve the issue in a bid to arrive at some kind of consensus. The Finance Ministry has conveyed to the Railways that if the cost of the project stretches to the estimates given by Japan International Cooperation Agency (JICA) then it would not be a feasible idea to have such a project in place. The Railways has made a presentation before the PMO and appraised it about the latest situation on the Rs. 28,000 crore freight corridor that is a dream project of Railway Minister Lalu Prasad.

However, the Indian Railways and JICA differ over the cost of the project meant to link New Delhi, Mumbai and Kolkata.

While the Railways has pegged the cost of the project at Rs. 28,000 crore, JICA, after a latest survey, has informed the Railway Board that the project cost will be over Rs. 54,000 crore.

The DFC project entails setting up of a dedicated railway network between Mumbai and New Delhi, and Ludhiana in Punjab and Son Nagar in Bihar. The Railways would need to acquire more than 8,800 hectares for constructing the proposed 2,783-km-long corridor. What has compounded the problem is that the Railways would have to acquire a huge chunk of private land which is already developed or under developed and JICA has insisted that people should be paid compensation at the market price for any land acquisition.

It is also insisting that the Railways will have to formulate a clear-cut policy on rehabilitation of people who stand displaced by the project. JICA has in principle agreed to provide Rs. 18,000 crore of loan for the project but has also suggested that the Railways should opt for electric locomotives instead of diesel ones.The Japanese side has made it clear to India that if it wants the freight corridor to run on diesel, they will not be able to provide the technology. JICA has already made a re-assessment of the project and has indicated that the final cost could not be brought below the Rs. 50,000-mark. JICA has also conveyed that the New Delhi-Kolkata arm of the corridor should not be built because it is not feasible.Railway Ministry officials said JICA's insistence on the use of electric locomotives and not diesel ones was meant to benefit the Japanese locomotive industry, particularly because India will be obliged to Japanese companies for the corridor project as part of the funding arrangement.

SUJAY MEHDUDIA

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