‘Freight corridor project economically feasible’

New Delhi: After about 17 months of study, the Japan International Cooperation Agency (JICA) presented the final study report on Dedicated Freight Corridor (DFC) to the Ministry of Railways here today.

While JICA has stated that the project is economically feasible, it has maintained its stance on the need to have electric traction on the Western corridor.

Since the Western corridor would primarily serve the container traffic, JICA has recommended moving double-stack containers with well wagons.

However, the Railways had questioned this pointing out several things.

“All the wagons used to move containers in the Indian Railways system are flat wagons. Investments in container wagons are made by container operators and not by the Railways, so their views should be taken into account,” Railways officials maintain, adding that international standard double-stack containers have not been commercially transported in electric traction anywhere in the world.

The final report was handed over to Mr K.C. Jena, Chairman, Railway Board, by Mr T. Fujii, Resident Representative, JICA India, along with Mr Tetsuya Masuzawa, Deputy Team Leader, and other members of JICA study team in presence of other Members and senior officials of Railway Board. While the officials declined to share details on what the final report says, they maintained that there is not much variation between the final draft report submitted to the Railways by JICA and the final study report.

Project cost


The final draft had pegged the total cost of the project at about Rs 50,000 crore. The costs include construction cost, rolling stock cost, operation and maintenance cost. JICA worked out the total investment cost, maintenance, and operation cost for 35 years and stated that the economic internal rate of return is 13.95 per cent for the Western dedicated freight corridor and 15.09 per cent for the eastern dedicated freight corridor. Given that a 12 per cent economic rate of return is considered a minimum base for judging a project as feasible, this project generates large economic benefits for the country, it said.

The financial internal rate of return is for the Western corridor is 9.08 per cent and Eastern corridor is 15.59 per cent, JICA had stated.



The economic rate of return include indirect benefits to the economy that are unlikely to be ploughed back to the investors, where as the financial rate of return measures the direct financial benefits from the project over a 35 year cycle.

Mr Jena said the DFC projects are one of the most ambitious infrastructure projects in the country. Implementation of this project requires massive resources and is also a challenge for our engineers in more ways than one.

Development of DFC for carrying additional traffic is essential in view of high growth in demand. The Railways has proposed a 2,700-km-long railway line project (Eastern Corridor – 1,279 km and Western corridor – 1,483 km) as an augmentation of capacity of Indian Railways network to handle the large increase in volume of traffic over the coming years.