“DFCs will surely be a game changer” March 2018 issue

“DFCs will surely be a game changer”

The Dedicated Freight Corridor Corporation of India Limited (DFCCIL) is expected to revolutionise India’s logistics and transport sector. With less than a year to go before the Eastern and Western corridors get commissioned, The Dollar Business caught up with Adesh Sharma, former Managing Director of DFCCIL, to know the current status of the project and understand the changes it will bring to India’s foreign trade.

Interview by Niladri S. Nath | November 2017 Issue | The Dollar Business

TDB: Dedicated Freight Corridor Corporation of India (DFCCIL) came into existence in 2006. What has been the progress so far?

Adesh Sharma (AS): The few initial years were spent setting up the infrastructure, which also includes land acquisition, collaboration with the World Bank, coordinating with state governments, etc. While it was a slow start, DFCCIL has picked up substantial speed over the last two years. In fact, during FY2015 and FY2016, DFCCIL awarded contracts worth more than Rs.35,750 crore, whereas contracts awarded by DFCCIL in the six financial years prior to FY2015 were worth only about Rs.13,200 crore. We have now awarded contracts for 92% of the total length of the Dedicated Freight Corridor (DFC) – the remaining contracts will be awarded by December 2017. The pace of work in sections between Khurja and Kanpur in Eastern Dedicated Freight Corridor (EDFC) and between Rewari and Palanpur in Western Dedicated Freight Corridor (WDFC) has witnessed a ten-fold increase in the last two years. Commissioning of both corridors will start in phases from March 2018 onwards, and 50% of EDFC and WDFC will be commissioned by April 2019. Construction of both the corridors is expected to be over by December 2020. The DFC network will be a game changer in the freight logistics sector.

TDB: The current share of rail freight transport is 36%, which DFCCIL hopes to increase to 40-45% by FY2030. How will it compete with roadways?

AS: There are certain advantages of DFC. The average freight movement speed on DFC will be 70 kmph, almost a three-fold increase from the existing 25 kmph of Indian Railways (IR). This will lead to a reduction in transit times and reduce the unit cost of transportation by 40%. It will also offer enhanced capacity as more than 150 trains can run in each direction on the double-line tracks.

At least 70% freight traffic of IR will be transferred to DFC as per the Concession Agreement between DFCCIL and the Ministry of Railways. DFC will offer faster and safer delivery compared to road transport at a much lower cost. Also, the DFC network is environment-friendly and is expected to prevent CO2 emission of 457 million metric tonne (MMT) over a 30-year period.

DFC aims to attract freight traffic of the Golden Quadrilateral that joins the four metros (Delhi, Mumbai, Chennai and Kolkata). The Quadilateral takes up 16% of the route length of IR network and carries 58% of the total freight traffic. We hope EDFC and WDFC will ultimately subsume 22% of the freight traffic parallel to their routes and 38% of the Golden Quadrilateral freight traffic.

TDB: Once the DFCs become operational, what is IR’s expectation in terms of freight growth? What benefit can the Exim community expect?

AS: With the commissioning of the DFCs, there will a quantum jump in transportation capacity. As per a World Bank and Japan International Cooperation Agency (JICA) forecast, EDFC will move 264 MMT freight whereas WDFC will transport 284 MMT freight. The industrial corridors, which are coming up along EDFC and WDFC, will boost industrial development. Having said that, the increase in volume depends on key factors like industrial growth, GDP and enhanced demands for domestic and export-import traffic.

The DFCs will have heavy haul trains, each train capable of carrying 13,000 metric tonne (MT) compared to the present capacity of 5,000 MT. The double stack container train operation on WDFC is expected to increase throughput up to 360 TEUs per train.

The increased capacity and speed will bring a lot of efficiency to the system by facilitating faster deliveries to and from the ports. These factors will automatically reduce the logistics cost of operators and offer maximum benefit to Exim community. The speed of delivery through DFC network will surpass any anticipated or derived benefit from the existing pattern of freight movement. It will also improve our supply chain management.

TDB: Can you share the status and progress of EDFC and WDFC so far?

AS: So far, the progress has been satisfactory. EDFC has a total route length of 1,856 km and boasts a 1,409 km long electrified double-track segment between Dankuni (West Bengal) and Khurja (Uttar Pradesh). In addition, an electrified single-track segment of 447 km will run between Ludhiana-Khurja-Dadri, covering Punjab, Haryana and Uttar Pradesh. Civil contracts for 83% of the total length in EDFC have already been awarded and work is in progress in Khurja-Kanpur, Kanpur-Mughalsarai, Mughalsarai-Sasaram, Pilkhani-Sahnewal and Khurja-Dadri sections.

Apart from building bridges and embankment, the mechanised track laying work with the New Track Construction (NTC) machine is also underway in Bhadan, Maitha and Daud Khan simultaneously. Electrical, signalling and telecommunication work contracts for Khurja-Kanpur and Kanpur-Mughalsarai sections have also been awarded and the design work is in progress. The remaining contracts worth Rs.3,474 crore in EDFC will be awarded by the year end.

When it comes to WDFC, it runs through five states and covers a distance of 1,504 km of double line electric tracks from Jawaharlal Nehru Port Trust (JNPT) to Dadri – via Vadodara, Ahmedabad, Palanpur, Phulera and Rewari. The alignment has been kept parallel to the existing lines except for a detour at Diva, Surat, Ankleshwar, Bharuch, Vadodara, Anand, Ahmedabad, Palanpur, Phulera and Rewari. All civil contracts for WDFC have already been awarded and work is in progress in various sections such as Rewari-Iqbalgarh, Iqbalgarh-Vadodara, Vadodara-Vaitarna, etc. Work on electrical, signalling and telecommunication have already begun.

Three more freight corridors were proposed in 2016 – East-West Corridor (2,328 km), North-South Corridor (2,327 km) and East Coast Corridor (1,114 km) where work is yet to begin.

TDB: DFC faced roadblocks due to issues like environmental clearances and land acquisition. What is the status?

AS: One of the major hurdles in executing any gigantic infrastructure project is land acquisition. The DFC network covers nine states and more than 61 districts. Hence, it required the acquisition of more than 11,000 hectares of land from over 3 lakh project affected people (PAPs). The reluctance of the landowners to give away land was a huge challenge. 2,100 court cases and 10,600 arbitration cases pertaining to land acquisition have been filed against DFCCIL. The provision of employment in the new Land Acquisition Act is also an area of concern. Despite those challenges, 96% of the land has been acquired and balance 4% is in process of being acquired. We have also obtained a majority of the key environmental clearances.


"Construction of both corridors is expected to be completed by December 2020"


TDB: What role did funding agencies, play in the project’s success?

AS: Both World Bank and JICA have played a major role in every step of the project. The seven-stage tender finalisation process was scrutinised by them. Thanks to the cooperation from both, all the contracts for Western Corridor and most contracts for EDFC have been finalised. We also hold regular discussions with the agencies on project execution.

TDB: DFCCIL has also been working towards developing multi-modal logistics parks (MMLPs) and setting up private freight terminals (PFTs). What is the latest development?

AS: We have signed a memorandum of understanding (MoU) with Inland Waterways Authority of India (IWAI) and Delhi Mumbai Industrial Corridor Development Corporation Limited (DMICDC) for developing multi-modal logistics parks (MMLPs). Efforts are now being made to have sector-wise interactions with the stakeholders and potential freight generators. So far, we have received proposals for setting up private freight terminals (PFTs), private sidings and port connectivity to DFCs. We are looking at the PFT proposals based on traffic projections and feasibility aspects. However, we are open to suggestions for improvements from all prospective customers and trade agencies.