Eastern Dedicated Freight Corridor Project

May 31, 2011


India's Dedicated Freight Corridor (DFC) program will enable the country to create one of the largest freight operations in the world. The DFC will reduce GHG emissions by 2.25 times over a 30 year period. The World Bank will support the program with $975 million in the first phase.

May 31, 2011: Chronic under investment in infrastructure for all modes of transport has led to widespread congestion and low levels of service in the transport sector in India. Since the late-1990s, however, an increase in investments in road transportation has seen this sector grow more rapidly than the railways. Today, 90% of India's passenger traffic and 65% of its freight operations use road transportation. And these shares are growing despite the fact that rail transportation is more efficient for long-haul travel. Given the rising prices of oil, the attendant energy security issues, and the escalating concerns about the greenhouse gas (GHG) emissions associated with road transportation, the Government of India is committed to increasing the share of rail transportation in the country. This critically requires restoring the railways' competitive strengths.

India's Dedicated Freight Corridor (DFC) program therefore intends to introduce a number of transformational advances in the way the Indian Railways (IR) organizes itself, constructs infrastructure, and operates its services, enabling it to expand its customer base and market share. The Indian Railways has a rail network about the same size as China's, but the volumes of freight it carries are the fifth largest in the world, after the USA, China, Russia and Canada. The IR's four

major routes, known as the Golden Quadrilateral, connect the key metropolises of Delhi, Mumbai, Chennai and Kolkata, and carry the country's heaviest rail traffic. These routes are however highly congested; although they account for just 16% of IR's rail track they carry more than 60% of the freight transported.

Dedicated Freight Corridors along the 'Golden Quadrilateral'

With India's freight traffic projected to grow at more than 7% p.a., the Government of India plans to urgently add more freight lines along these congested routes by establishing dedicated freight-only lines, mostly paralleling the existing quadrilateral. These corridors will help India make a quantum leap in increasing the railways' transportation capacity by building high-capacity, higher-speed dedicated freight corridors along the Golden Quadrilateral.

The government's DFC program is proposed to be completed in stages, with the western corridor (Delhi-Mumbai) and the eastern corridor (Ludhiana-Delhi-Kolkata) being the first two to be developed. These corridors will help to boost India's industrial productivity by transporting raw materials to industrial hubs and manufactured goods to ports in a faster and more efficient manner, and at reduced costs. They will also provide a better standard of service to passengers, especially where this service has suffered due to the mixing of faster passenger traffic with the slower moving freight trains. Improvement of the eastern corridor will also contribute to the development of the proposed Trans-Asian Railway involving infrastructure investments in India, Bangladesh, and countries further east.

A Green Project

The DFC is also a green project as, by shifting freight transportation from road and conventional rail to the more energy-efficient DFC rail, it will lower energy consumption in India's transport sector. Moreover, unlike the existing rail network, which runs on a combination of diesel and electrical locomotives, the corridor will operate entirely through electric locomotives, reducing carbon emissions significantly. In fact, a carbon footprint analysis conducted by the Indian Railways finds that the DFC will generate 2.25 times less greenhouse gas emissions over a 30 year period compared to business as usual.

World Bank Support

The World Bank will finance around 1,100 km of the 1,800 km Eastern Dedicated Freight Corridor (Ludhiana - Delhi-Mughal Sarai) in three phases. It will also help develop the institutional capacity of the Dedicated Freight Corridor Corporation (DFCCIL) to build and maintain the DFC's infrastructure network.

The eastern corridor (Delhi-Kolkata) will improve services for passengers in the lower Ganges basin, one of India's most densely populated areas and home to many of its poorest citizens, who rely heavily on rail for affordable travel. It will also remove constraints to growth in the industrial heartland of Punjab and Haryana which lie at the northern end of the corridor.

In the first phase of support, the World Bank's Eastern Dedicated Freight Corridor Project 1 will provide $975 million to finance the 343 km Khurja to Kanpur section. The Project will help increase the capacity of these freight-only lines by raising the axle-load limit from 22.9 to 25 tons and allow speeds of up to 100 km/hr.

The DFC program will provide India the opportunity to create one of the world's largest freight operations, adopting proven international technologies and approaches which can progressively be extended to other important freight routes throughout the network. It will also enable the Indian Railways to recapture the market share they lost to the very competitive Indian trucking sector, which has among the lowest road freight tariffs in the world.