Dedicated Freight Corridors Project To Have Multiplier Effect On The Logistics Industry: ICRA

Dedicated Freight Corridors Project To Have Multiplier Effect On The Logistics Industry: ICRA

The commissioning of dedicated freight corridors (DFCs) is expected to benefit the Indian Railways (IR) in the medium to long term and will be a game-changer in the Indian logistics industry.

As per an ICRA note, the DFCs will add incremental capacity to the railway network and would also have a positive multiplier effect on the logistics industry in India.

Shedding more light, Shamsher Dewan, Vice President and Sector Head- Corporate Ratings, ICRA, said: “Currently IR account for 30 per cent of total freight movement in India and are a preferred mode of transportation for long haul and bulky commodities such as Coal, Iron Ore, Fertilizers, Steel and Cement.”

“Although, it continues to maintain its dominance in transportation of select commodities, it has lost market share on an overall basis over the past few decades due to significant increase in freight charges and infrastructure bottlenecks. However with the commissioning of the DFC, IR’s competitive position is expected to improve and enable it to capture market share in freight transportation.”

In the first phase, the Western Dedicated Freight Corridor (WDFC) and the Eastern Dedicated Freight Corridor (EDFC) will be commissioned. The WDFC is being financed by Japanese International Cooperation Agency (JICA).

The WDFC, which will pass through Haryana, Rajasthan, Gujarat and Maharashtra, will greatly benefit the container freight movement and the CTOs by reducing the turnaround time and operating time tabled trains.

The EDFC will pass through Punjab, Haryana and the densely populated states of Uttar Pradesh, Jharkhand and West Bengal. The major commodity carried over rail in this region being coal, the EDFC is expected to provide uninterrupted and fast deliveries to the thermal plants in Delhi and Uttar Pradesh, which will greatly benefit industries and; the general population by ensuring uninterrupted power supply.

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Despite getting the government approval in 2008, the DFC project has been delayed on account of land acquisition and obtaining other approvals. The biggest challenge post completion of DFCs would be upgrading feeder lines of IRs to support heavier trains that will move on the DFC.

Smooth transition of trains from DFC to Indian Railway’s infrastructure will be important to ensure timely movement of trains. Any delays would greatly hamper the flow of trains as DFC junctions have low holding capacity by design Read more

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