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UPSC » Daily News Analysis ‘Dedicated Freight Corridors (DFC)’ : 21 June

Daily News Analysis ‘Dedicated Freight Corridors (DFC)’ : 21 June

Table of Content

Need for Dedicated Freight Corridors:

  • Golden Quadrilateral and its diagonals (Delhi, Mumbai, Chennai, Howrah) comprise only 16% of the Indian Railways’ route network but carry 52% of passenger traffic and 58% of revenue-earning freight traffic.

  • The route is highly saturated, with line capacity utilization ranging between 115% to 150%.

  • Over the decades, railway freight share declined from 88% (1950-51) to 26% (2021-22).

  • National highways, covering just 0.5% of the road network, now carry nearly 40% of road freight.

  • Rising domestic economy, infrastructure projects, and international trade created the need for separate freight-dedicated corridors along the Eastern and Western arms of the Golden Quadrilateral.

Project Background (DFCs):

  • Announced in Railway Budget 2005-06.

  • Discussed at the Japan-India Summit 2005; feasibility study funded by Japan submitted in 2007.

  • Dedicated Freight Corridor Corporation of India Limited (DFCCIL) established as a Special Purpose Vehicle (SPV) under the Companies Act, 1956 on 30 October 2006.

Vision and Mission (Dedicated Freight Corridor Corporation of India Limited (DFCCIL))

  • Vision: Partner with Indian Railways to retain and grow freight market share by providing efficient, reliable, and customer-focused services.

  • Mission:

    • Build corridors with advanced technology to create additional capacity and offer safe, efficient, reliable, and cost-effective transport options.

    • Establish Multimodal Logistics Parks to integrate road and rail transport.

    • Support ecological sustainability by promoting rail as an eco-friendly freight option.

  • Funding via a mix of debt (JICA & World Bank loans) and equity from Ministry of Railways

  • DFCCIL capital structure: Debt-Equity ratio of 3:1

Environmental Impact:

  • Decongest existing roads and railway routes

  • Promote a shift to efficient rail transport, reducing Greenhouse Gas (GHG) emissions

  • Expected COâ‚‚ savings: over 450 million tons in the first 30 years (as per Ernst & Young study)

Why in News?

  • With the final stretch of the WDFC nearing completion, DFCCIL is now focusing on Gati Shakti multi-modal terminals and planning new freight corridors.