Dedicated Freight Corridors are on the fast track with institutional finance from the World Bank and JICA. However, the roadmap for allied projects along the corridors is still not clear, writes Janaki Krishnamoorthi.
The Dedicated Freight Corridor (DFC) has opened up a sea of opportunities for developers, contractors, equipment and technology providers in both the public and private sectors.
"DFC project will provide an excellent opportunity to various railway equipment and service providers to participate as consultants, civil work contractors, PMC contractors, system designers, technology providers, etc," reveals RK Gupta, Managing Director, Dedicated Freight Corridor Corporation of India Ltd (DFCCIL). " It will also create strong opportunities for development of industrial sectors like steel, cement, copper, aluminium, construction machinery, electrical equipment, power, railway signalling, telecom, etc. A stretch from Sonnagar in Bihar to Dankuni in West Bengal is planned for implementation under public-private partnership (PPP), wherein a private developer shall act as concessionaire, and operate and maintain the infrastructure for train operations," elaborates Gupta.
Adds Gupta, "We have received large number of applications for participation as consultants or contractors. We are now preparing a proposal for inviting applicants for Sonnagar-Dankuni section on PPP model."
DFCCIL is an SPV created to undertake planning, development, mobilisation of financial resources and construction, maintenance and operation of the DFCs - the Eastern Corridor from Ludhiana to Dankuni (1,232 km) and the Western Corridor from Jawaharlal Nehru Port in Mumbai, to Dadri, Uttar Pradesh (1,468 km) along with interlinking of the two corridors at Khurja in Uttar Pradesh.
The rail corridor covers about 2,700 route km across 10 states in both the western and eastern sector. Civil contracts for over 1,100 route km have been awarded. Contracts for others are scheduled to be awarded this fiscal. Major players include Tata-Aldsea JV, Sojitz-L&T JV, Ferrovia Transrail and BSC-CNC JV.
"The development of logistic parks and freight terminals on the corridors with attached and related facilities for multi-modal transport and warehousing would drastically reduce the transit time and also bring down the logistics cost besides bringing in efficiency in the logistics sector," avers Vinod Asthana, Managing Director, Central RailSide Warehouse Company Ltd (CRWC). "The design of the freight terminals and development of warehousing facilities are to be need-based and instead of general warehousing, the focus shall shift to commodity specific warehouse and similarly for the ICDs and CFCs," adds Asthana.
A site near Marwar has been identified for a logistics park. Discussions are underway with Rajasthan for approvals. CRWC is in the process of appointing a consultant to identify a suitable site between Allahabad and Mughalsarai. Both parks will provide integrated facilities for multimodal transport and related activities.
Design & technology
The DFCs will adopt state-of-the-art technology. "DFCCIL will build its two corridors with appropriate technology that will create additional capacity and guarantee efficient, reliable, safe and cheaper options for mobility to its customers. We will encourage use of technological innovations in the area of track, electrification, signalling and train operations,"says Gupta.
Anshul Gupta, Executive Director - Corporate Coordination, RailTel Corporation of India Ltd (RCIL), says: "DFCCIL shall be adopting all important modern railway signalling and telecom system like the train protection and warning systems to avoid collisions, computer-based electronic interlocking systems, GSM-R system for safe train control communication, axle counter based train detection systems, operations control centre etc." RailTel provides all kinds of modern railway signalling and telecom systems, including some complex ones that require special competence and expertise.
Apart from land acquisition and environmental clearances, conditions laid down by Japan International Cooperation Agency (JICA), the Western Corridor funder, had created hassles. The Indian Railways wanted to run double-stacked containers in Delhi-Mumbai corridor by diesel locomotive, the JICA had suggested electric locomotives. JICA-funding norms stipulate involvement of a Japanese partner as the lead contractor even in civil contracts. This resulted in poor bidding; many Japanese firms were reportedly willing to enter the Indian civil construction market. But with loans being given at low interest and long term repayments, Indian Railways had little option but to give in.
JICA has a different take. "JICA did not impose any unilateral condition. On electrification, Government of India made a final decision from the perspective of environment friendliness, after consultations were held between the GoI and JICA," states Shinya Ejima, Chief Representative, JICA India. "Both the prime ministers of India and Japan agreed to apply Special Terms for Economic Partnership (STEP) condition to Western DFC project. Under STEP scheme, GoI can benefit from introducing Japanese technology and knowhow as well as highly concessional loan .conditions. To avoid poor participation, GoI and JICA have held several road shows in Japan. So far, we have achieved more than one bid in all packages. Both GoI and JICA have been trying to resolve the issues one by one in order to complete the project as early as possible," adds Ejima. Till date JICA has disbursed over JPY 12 billion at interest rates ranging between 0.01 per cent and 0.2 per cent with a repayment period 40 years including10 years grace period.
Allied projects like industrial parks, logistics parks are yet to take off. Apart from the regular land acquisition, project clearances, funding there will be some new areas that will need a look into, aver industry professionals.
"Design and adaption of new echnologies to suit Indian environment, needs, and operators' and staff competencies will be a major challenge," points out Gupta.
Asthana lists out some more, "The major challenge will be acquisition of land for setting up logistics park with traffic potential. Acquiring adequate trained manpower for the operation and to ensure that all multi-modal activities are carried out efficiently will be another challenge. Standards have to be defined, so that mechanisation for operating various activities can be done in future, to reduce labour dependency and to ensure 24x7 operations."
Backed by institutional finance from the World Bank and JICA, and with 95 per cent of the land for the projects acquired and all major statutory clearances in place, the DFCs are definitely on the fast track.
But for other allied projects like industrial zones, logistic parks, freight terminals and other supporting infrastructure being planned along the corridor, the road map is yet unclear.
A new barometer of efficiency
We live in a globalised world, a principal contributor to this phenomenon is containerisation - the ubiquitous container helped unitise cargo, reduce costs and bring about unprecedented efficiencies across road, rail and sea transportation.
Cargo and Ports are generally separated by some distance - a distance bridged by traditional means of transport like road and rail. Over time as trade exploded and infrastructure played catch up, methods had to be invented to support the burgeoning volumes. One such concept pioneered by the US in 1984 was the double stacking of containers on rail wagons or simply stacking one container over the other - the concept in effect doubled carrying capacity of rail wagons overnight while costs to haul these trains remained nearly the same - allowing for some additional fuel consumption on account of the additional tonnage hauled.
In the Indian context - passenger travel has always had precedence over cargo transportation, and monetary allocations for wagon infrastructure had to compete with other government priorities, double stacking was the next new efficiency barometer - the Indian Railways and APM Terminals Pipavav were instrumental in trailblasing this concept when the first double stack train in India made its way from Jaipur to Pipavav in 2006. APM Terminals Pipavav today carries over 30 per cent of its rail throughput by the double stack mode. Though the concept is limited to a select few routes on the Indian rail network at this time, two important developments are afoot which could change the dynamics of the exim business from North and North West India
Rail operators in association with ICD operators are presently developing double stack hubs on the outskirts of the NCR region. These hubs like Kathuwas, Garhi, Patli and Pali once fully operational will have the capacity to carry almost the entire rail throughput as double stack for a majority of the long haul between Pipavav and North and North West Indian ICDs - at the hubs the top tier will be shifted to local single stack shuttles travelling to the eventual destination ICD, saving costs for rail operators, shipping lines, shippers and consignees.
The under development Delhi-Mumbai Industrial Corridor (DMIC) envisages 24 industrial nodes with direct rail connectivity to ports like Pipavav by means of a dedicated freight corridor. The corridor is destined to be an exclusive rail line designed for double stack containers, of up to 90 wagons, traveling at speeds over 100 km/hr with enhanced axle loads. When operational these trains could carry up to 360 TEUs one way or 720 TEUs on a round trip basis. The enhanced axle loads will enable even heavier containers to be double stacked.
Benefits to rail operators
Benefits to ICDs
Benefits to shipping lines, shippers and consignees
Benefits to APM Terminals Pipavav
Reduced rail congestion at port, lesser dwell time and increased capacity. - Prakash Tulsiani, Managing Director, Gujarat Pipavav Port
Major contractors working on DFC
Land to be acquired