World Bank approves $650-m loan for eastern freight corridor

The World Bank Board on Wednesday approved $650 million towards the third loan for the Eastern Dedicated Freight Corridor (EDFC), a freight-only rail line that will help faster movement of raw materials and finished goods between the western and eastern parts of India.

The approved project, EDFC-3, will build the 401-km Ludhiana-Khurja section in Uttar Pradesh, Haryana and Punjab. The loan has a seven-year grace period and a maturity of 22 years.

The EDFC is 1,840-km long and extends from Ludhiana to Kolkata. The Dedicated Freight Corridor Corporation of India Ltd (DFCCIL) is implementing the project.

“The project will provide India the opportunity to create one of the world’s largest freight operations. The corridor, which will pass through states like Uttar Pradesh and Bihar, will benefit from the new rail infrastructure, bringing jobs and much-needed development to some of India’s poorest regions,” said Onno Ruhl, World Bank Country Director in India.

“Moving freight from road to rail will reduce the carbon footprint of freight by 2.25 times,” he added. The Eastern Freight Corridor is estimated to reduce Green House Gas emissions by 55 per cent.

The first loan of $975 million for the 343-km Khurja-Kanpur section in the EDFC project was approved by the World Bank Board in May 2011 and is already under implementation. The second loan of $1.1 billion for EDFC2, which covers 402 km from Kanpur to Mughal Sarai, was approved by the World Bank in April 2014.

These corridors will help India increase railways’ transportation along the Golden Quadrilateral. Currently, the rail routes that form a Golden Quadrilateral connecting Delhi, Mumbai, Chennai and Kolkata, account for 16 per cent of the railway network, but carry more than 60 per cent of India’s total rail freight.