Railways, India: Dedicated Freight Corridors
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The need for DFCs
2024: University of New South Wales study
Dheeraj Mishra, Nov 6, 2024: The Indian Express
Dedicated Freight Corridors are improving India’s GDP and adding significantly to the Indian Railways’ revenue, a recent study by Australia’s University of New South Wales has said.
The study said that reduction in freight cost and travel time due to the DFCs has helped reduce prices of commodities by up to 0.5%, and the corridors have contributed to 2.94% of the revenue growth realised by the Railways between FY 2022–23 and FY 2018–19.
The study was published in the journal Elsevier. It analysed the Western Dedicated Freight Corridor (WDFC) data for FY 2019–20, and came up with its findings by using a Computable General Equilibrium model initiated by the central government.
What are Dedicated Freight Corridors (DFCs)?
Dedicated Freight Corridors (DFCs) are specific routes for freight transportation, which offer higher transport capacity due to the faster transit of freight trains, running of double stack container trains, and heavy haul trains. This improves the supply chain for the industries/logistics players located at economic centres along the way, leading to growth of export-import traffic too.
The Ministry of Railways took up the construction of two DFCs — the 1,337-km Eastern Dedicated Freight Corridor (EDFC) from Sonnagar in Bihar to Sahnewal in Punjab; and the 1,506-km Western Dedicated Freight Corridor (WDFC) from Jawaharlal Nehru Port Terminal in Mumbai to Dadri in Uttar Pradesh — back in 2006.
The EDFC is complete and commissioned, with feeder routes to different coal mines and thermal power plants. The WDFC is 93% commissioned, with feeder routes serving various cement plants and the large ports of Mundra, Kandla, Pipavav, and Hazira in Gujarat. It is expected to be fully complete by December 2025.
As of March 31, 2024, Rs 94,091 crore had been spent on executing the DFC project, excluding land acquisition costs.
Why were DFCs needed?
The need for the Dedicated Freight Corridors was felt for two reasons. First was the over utilisation of the Railways’ golden quadrilateral linking the four metropolitan cities of Delhi, Mumbai, Chennai and Howrah, and its two diagonals (Delhi-Chennai and Mumbai-Howrah). This stretch comprises only 16% of the route, but carried more than 52% of the passenger traffic and 58% of revenue-earning freight traffic for the Railways.
Another reason was the Railways’ dipping share in total freight traffic. This data was compiled as part of the National Rail Plan, which envisaged that the share of freight traffic by rail should go up to 45% by 2030.
The creation of DFCs was announced in Parliament during the Railway Budget for FY 2005-06. In September 2006, Dr. Manmohan Singh, the then Prime Minister, laid the foundation stone of EDFC at Ludhiana, and in October 2006, the foundation stone of WDFC at Mumbai.
On October 30, 2006, Dedicated Freight Corridor Corporation of India Limited (DFCCIL) was incorporated as a Special Purpose Vehicle for the construction, operation, and maintenance of the corridors.
On March 12, 2024, Prime Minister Narendra Modi inaugurated the three latest stretches of the DFC — 135-km Makarpura-Sachin section on the WDFC; and the 179-km Sahnewal-Pilkhani section & 222-km Pilkhani-Khurja section on the EDFC.
Current status
Currently, on an average, 325 trains are running per day, 60% more than last year. The freight trains on DFC are faster, heavier & safer. Since inception, the DFCs have carried over 232 billion Gross Tonne Kilometres (GTKMs) and 122 billion Net Ton Kilometers (NTKMs) payload.
According to the DFCCIL, more than 10% of freight running of Indian Railways is now handled by DFC. A DFCCIL official said that a comprehensive and holistic study of the impact of the DFCs on the Indian Economy is underway, and the results are expected soon.
There are four more such proposed corridors — the east coast corridor from Kharagpur to Vijayawada (1115 km); east-west sub-corridor-I from Palghar to Dankuni (2073 km); east-west Sub-corridor-II from Rajkharsawan to Andal (195 km); and the north-south sub corridor from Vijayawada to Itarsi (975 km).
Basis of the Australian university study
The research is based on different kinds of data including freight costs, industry inputs, and population data. It also factors in regions, industries, consumers and the overall improvements in the freight transport network. The DFCCIL said that the accuracy of the model has been calibrated and validated using economic data as well as data from the Ministry of Road Transport and Highways and the Railways.
The study found that the introduction of the DFCs provided great benefit in western regions due to significant reductions in freight costs. The findings also indicated a ‘social-equalising effect’, with states that have a lower per-capita GDP experiencing significant benefits.
Land compensation issues
2016
Rail Project Battles Compensation Claims
The dedicated railway freight corridor has finally managed to award all contracts for the Dadri-Mumbai link over 11years after the flagship infrastructure project was announced. But on the eastern front -that will connect Ludhiana with Dankuni in West Bengal -nearly 10% of the land, which is close to 450 hectare, is yet to be acquired even as funding has now been tied up.
For the Rs 81,450 crore project, land acquisition and clearances have been the biggest headache so far. The project needed around 11,600 hectare -6,000 hectare for the western and 4,587 hectare for the eastern stretch. While it was battling court cases and arbitration, a third blow came by the way of the new land acquisition cost, which pushed up the average price from around Rs 1.3 crore a hectare to around Rs 2 crore -an increase of around 54%. Project cost has also been increased as the land acquisition cost rose 75% from the budgeted level of around Rs 8,000 crore to nearly Rs 14,000 crore now . This could go up further depending of the arbitration awards.
In recent years, land acquisition has been a major headache for most infrastructure projects -highways, railways, power generation and special economic zones (SEZs). In several cases, the projects needed to be reworked, if not shelved.
The corridors running across 3,360 km are aimed at building electrified railway system to enable each train to carry a load of up to 13,000 tonnes -which is the load carried by 1,300 trucks. On each corridor, Dedicated Freight Corridor Corporation of India (DFCCIL) is laying double lines, which will treble the average speed of the double-stack goods trains from 25 kmhour to 75 kmhour.While the western leg is funded by Japanese agency JICA, eastern stretch is financed by the World Bank.
“There is no escalation in the project cost. Whatever increase is there is on account of higher cost of land,“ said DFCCIL managing director Adesh Sharma, adding that the project would be fully ready by 2019-end, a year behind the original deadline.
But, before that it needs to battle nearly 2,000 court cases and over 9,500 arbitration awards, of which nearly half are yet to be disposed off. DFCCIL planned the project in a way that it avoided large cities, where land acquisition was going to be a problem. But, challenges have come mainly from areas around the large cities, where prices are higher and “fertile“ agricultural land is being acquired.
Sample this: Nearly half the arbitration cases that are pending are in Haryana (2,277 out of 4,679 cases). When it comes to court cases, Uttar Pradesh tops the list with 669 out of the 1,020 pending cases.
“Most of the arbitration cases relate to compensation based on the latest registration price. Wherever, there is an award, we are paying higher compensation,“ Sharma said.
