Government Shifts Gear: Eyes Commodity-Specific Networks to Replace Proposed Freight Corridors

In a significant development, the government is poised to abandon plans for establishing three new dedicated freight corridors (DFCs), namely the East Coast, East-West, and North-South, with an estimated collective investment of Rs 2 trillion. Instead, the authorities are contemplating the creation of commodity-specific rail networks, as revealed by a senior railway official speaking to Financial Express under the condition of anonymity.

The decision comes amidst challenges faced by the recently commissioned east and west freight corridors in attracting bulk customers and grappling with network planning issues. The utilization rates of these corridors remain relatively low.

Despite the Railway Board receiving detailed project reports for two of the proposed corridors (East Coast and North-South), and with the report for the third one (East-West) anticipated imminently, there is a growing inclination to reconsider pursuing these projects.

According to the insider, consultations have already taken place between members of the Railway Board and the Dedicated Freight Corridor Corporation (DFCCIL) regarding the project reports.

“The detailed reports for the new DFCs have been submitted to the rail ministry for further approvals, but indications suggest that the railways may shift focus away from these corridors in favor of developing commodity-based corridors, aligning with the finance minister’s recent announcements,” the official disclosed.

Finance Minister Nirmala Sitharaman had earlier outlined major railway corridor projects in her interim budget speech, emphasizing the development of exclusive corridors catering to specific commodities like energy, minerals, and cement, along with those serving specific needs like port connectivity and high-traffic density.

“The introduction of these projects under PM Gati Shakti for enabling multi-modal connectivity aligns with our objective to accelerate GDP growth and reduce logistic costs, complementing the existing DFCs,” Sitharaman remarked in a recent statement.

This shift marks a notable departure from the government’s prior stance, as highlighted in Sitharaman’s Budget 2021–22 speech, where she initially announced more generic East Coast, East-West, and North-South corridors.

Had they been executed, the proposed corridors would have spanned a combined length of 4,315 kilometers, with the East Coast corridor covering 1,078 kilometers connecting Kharagpur to Vijaywada and the North-South corridor spanning 931 kilometers from Itarasi to Vijaywada.

The East-West corridor would have been split into two sub-sections: the 2,106-km Palghar to Dankuni section and the 200-km Rajkharswan to Andal section. These initiatives aimed to significantly reduce freight transit times, lower overall logistics costs, and augment the railways’ share in total cargo movement.

“The rationale behind commodity-specific corridors is their immediate appeal to existing customers. The DFCCIL has faced challenges in promoting the eastern and western dedicated freight corridors due to underlying network planning issues,” explained the official.

Currently, the Eastern Dedicated Freight Corridor (EDFC) and Western Dedicated Freight Corridor (WDFC) are operating well below capacity. For example, the fully completed EDFC has a capacity to handle 120 trains per day in each direction, but due to subdued demand, only 75–80 trains are currently operational. The EDFC serves power plants in northern states like UP, Delhi, Haryana, Punjab, and parts of Rajasthan, in addition to handling traffic comprising finished steel, food grains, cement, fertilizers, and limestone.

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