freight

Railways to follow global aviation model for asset monetisation of DFC

Post By : Karvi Rana
Post Date : February 24, 2021
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The Indian Railways is planning to follow the global aviation model for the asset monetisation of the dedicated freight corridors (DFCs). The asset monetisation process of the DFCs will involve offering services to businesses wherein train timings will be allotted to private parties through a bidding process.

Earlier, FM Nirmala Sitharaman in the Budget announced the governments’ plans to monetise Eastern DFC (EDFC) and Western DFC (WDFC) assets after the projects were commissioned.

Asset monetisation refers to the process of extracting the value of investment made in public assets, which have not yielded sufficient returns so far.

At present, the Railways is monetising almost all the available assets of DFC, and their initial asset monetisation plans include leasing out the tracks to private players to operate trains and allowing telecom players to use DFCs’ 2,800-km optic fibre network.

Railways would come out with a detailed chart of the timetable for trains and the paths available in that particular chart will be sold to private players, said an official source informed the media.

“It will be almost an aviation model followed globally. Here, the company will be having an assurance on the timing of the train and a cleared track during that time,” he said. In European airports, like Heathrow, slot allocation for aviation players is done through an aggressive bidding process.

Regarding the usage of optic fibre network along the tracks, the Dedicated Freight Corridor Corporation (DFCCIL) has already signed a memorandum of understanding with Railtel.

DFCCIL is eyeing to complete both EDFC and WDFC by June 2022. DFCCIL claims to have already acquired almost 99% of the land required for the project.

While the EDFC will cover an 1,856-km stretch from Ludhiana to Dankuni, the WDFC will be from Dadri to Jawaharlal Nehru Port Trust, covering 1,504 km.

Both the DFCs are expected to cost around Rs 81,459 crore. The World Bank is partly funding the EDFC through a loan of Rs 13,625 crore out of the estimated cost of Rs 30,358 crore.

On the other hand, WDFC is being funded through the aid of Rs 38,722 crore from the Japan International Cooperation Agency (JICA), out of the total project cost of Rs 51,101 crore. The remaining cost of both the DFCs is being funded through budgetary support from the government.

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