Japan steps up with Rs 11k cr plan

NEW DELHI: Japan is all set to give a push to the Indian Railways’ ambitious Delhi-Mumbai freight corridor project. The Japan International Cooperation Agency (Jica) is expected to put in Rs 11,000 crore in the project. The Railways have been pursuing Jica for over a year to get the fund.

“Jica has agreed to extend financial assistance to the project. It will be in the form of a soft loan. It will be disbursed over a period of five years to the Dedicated Freight Corridor Corporation of India (DFCCIL), the entity responsible for the execution of the project,” a Rail Bhawan official said.

Jica has extended the support under the special term for economic participation (STEP) programme, for 40 years, with a 10-year moratorium at 0.75% rate of interest. The STEP programme was initiated by Jica in 2004 to enable funding for overseas economic operations.

Rail Bhawan sources said there are other conditions attached to the assistance. For instance, 30% of the equipment will have to be sourced from Japan. The condition would also apply to hiring of contractors for construction of the corridor.

At present, the Railways are willing to contribute Rs 5,500 crore for the project. Simultaneously, various other options are being explored to garner the remaining funds. “These include seeking assistance from the World Bank or the Asian Development Bank or both to make the project financially feasible,” an official said.

The corridor is expected to run through Delhi, Uttar Pradesh, Haryana, Rajasthan, Gujarat and Maharashtra, along the Delhi-Mumbai Industrial Corridor (DMIC).

The major investment regions falling in DMIC are Dadri-Noida-Ghaziabad in Uttar Pradesh, Manesar-Bawal in Haryana, Khushkhera-Bhiwadi-Neemra in Rajasthan, Pitampura-Dhar-Mhow in Madhya Pradesh, Bharuch-Dahej in Gujarat and Igatpuri-Nashik-Sinnar in Maharashtra.