World Bank approves $975m loan for Eastern Freight Corridor

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The World Bank has signed a loan agreement of $975 million with the Indian Government and Dedicated Freight Corridor Corporation of India Limited (DFCCIL) for the development of Eastern Dedicated Freight Corridor (EDFC) Project- I.

The EDFC-I is a freight-only rail line that will help faster and more efficient movement of raw materials and finished goods between the Northern and Eastern parts of India.

This is part of India’s first Dedicated Freight Corridor (DFC) initiative, which is being built on two main routes – the Western and the Eastern Corridors.

Currently, the Golden Quadrilateral rail corridor comprises of four rail routes that connect Delhi, Mumbai, Chennai, and Kolkata, and account for just 16% of the railway network’s length, but carry more than 50% of India’s total rail freight.

“Indian Railways urgently needs to add freight routes to meet the growing freight traffic in India, which is projected to increase more than seven percent annually.

“Dedicated freight corridors will not only meet this growing freight demand, but also decongest the already saturated rail network and promote the shifting of freight transport from road to more efficient rail transport,” said Venu Rajamony, Joint Secretary, Department of Economic Affairs, Ministry of Finance.

World Bank financing for the EDFC will cover a route length of 1,130 kilometers (out of a total corridor length of 1,839 kilometers) and will be provided in three phases. The $975 million loan will finance the first phase, which is the 343 kilometer section that runs between Khurja and Kanpur.

“The Eastern & Western Dedicated Freight Corridors are iconic projects and will greatly upgrade rail transport capacity and help to increase the market share of railways”, R.K.Jain, Adviser(Infrastructure), Railway Board said.

Roberto Zagha, World Bank’s Country Director in India said:

“Implementing 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.”

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