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The Indian Railways and Dedicated Freight Corridor Corporation of India (DFCCIL) are likely to finalise the concession agreement over the next few weeks. The concession agreement will specify the track access charges that the Railways will pay to DFCCIL for using the rail freight corridor. The concession agreement is a pre-requisite to get funding from the World Bank.
“The track access charge will have a fixed component and a variable component. The fixed charge will cover the financing cost, depreciation, and basic operation and maintenance cost. The variable charge will take into account the level of traffic carried and the traction in use,” a senior official told Business Line .
WORLD BANK FUNDING
The Railway Ministry - through the Ministry of Finance - has been in talks with World Bank to get funds of at least $2.4 billion to part finance the eastern freight corridor. The Ministry is also trying to get an additional $1.1-billion fund from the World Bank for the eastern freight corridor project.
“In March, negotiations are slated with the World Bank. Apart from the extent of funding, the issues to be discussed include the kind of loan - fixed rate or floating rate funding. The target is to finalise considerations by March 31, so that an approval by the World Bank Board can be targeted by May 31,” added the official.
PRIVATE PARTNERSHIP
For the Sonnagar-Dankuni section of Eastern freight corridor – which has to be taken up on public private partnership (PPP) basis – the Indian Railways is trying to finalise the structure of model. “We have had discussions with investors on whether the model should be design-build-finance-maintain-transfer or, design-build-maintain-operate-transfer,” said the official.
The project cost of this link is about Rs 9,000 crore. The Railway Ministry and DFCCIL had an initial interaction with potential investors including Larsen and Toubro, GMR, GVK, to get a feedback on the models for inviting private participation.
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