Our PM has inaugurated Rewari-Madar section of Western Dedicated Freight Corridor (DFC). He also flagged off the world’s first double-stack long-haul 1.5-km-long container train hauled by electric traction from New Ateli-New Kishangarh. Last month, he had inaugurated a 351-km section between Khurja and Bhaupur in Uttar Pradesh for commercial operations.
For years, freight trains suffered second class treatment as express trains and other passenger trains got priority to use the tracks. All trains use the same tracks. As a result, goods never reached their destination in time. Both industry and the railways suffered as a result.
Dedicated Freight Corridors (DFCs)
- The DFC project was first proposed in April 2005 to address the needs of the rapidly developing Indian economy.
- They were proposed to ensure a more reliable, economical and faster transportation of goods.
- DFCs are planned to be ‘freight-only’ corridors which will make it cheaper, faster, and more reliable to move goods between industrial heartlands in the North and ports on the Eastern and Western coasts.
- These corridors seek to bring a paradigm shift in Railway Freight Operations in the country, thus providing relief to the heavily congested Golden Quadrilateral.
- The inception of DFCs can be understood clearly as one delves into Indian Railways’ freight operations scenario in the past.
- It was majorly the Golden Quadrilateral, linking the four metropolitan cities of Delhi, Mumbai, Chennai and Howrah and its two diagonals.
- This comprised 16% of the route, that carried over 52% of passenger traffic and 58% of freight traffic.
Executing into reality
- Several large coal mines and steel production facilities are located along the proposed Eastern DFC line.
- Container traffic is also predominant along the Western DFC route, arriving mainly from the Jawaharlal Nehru Port (JNPT).
- An SPV, ‘Dedicated Freight Corridor Corporation of India Limited’ (DFCCIL) has been set up under the Ministry of Railways to facilitate the functioning of these corridors.
- Both corridors entail an investment of $12 billion, with the World Bank and JICA (Japan International Cooperation Agency) partly funding the project with around $1.86 bn and $5.2 bn respectively.
Eastern and Western DFCs
(A) The Eastern DFC passes through Punjab, Haryana, Uttar Pradesh, Bihar, Jharkhand and West Bengal. It will be divided into two segments:
- An electrified double-track segment of 1,409 km between Dankuni in West Bengal and Khurja in Uttar Pradesh
- A single line segment of 447 km between Ludhiana – Khurja – Dadri
(B) From JNPT to Dadri via Vadodara-Ahmedabad- Palanpur-Phulera- Rewari, Western DFC will pass through Haryana, Rajasthan, Gujarat, Maharashtra and Uttar Pradesh.
- It is proposed to join the Eastern Corridor at Dadri.
- The Western Corridor primarily comprises of container traffic from JNPT and Mumbai Port in Maharashtra and other ports, including Pipavav, Mundra and Kandla in Gujarat.
The western corridor would primarily cater to containerized traffic, mostly exports and imports, while the eastern corridor will be used most to move coals from mines in east India to power plants in north.
Why need DFCs?
- To resolve the increasing need for road decongestion, accident reduction and ensuring energy security, the DFCs were launched to aid the growth of rail transportation in India.
- With the construction of these Freight Corridors, Indian Railways will open new avenues for investment and greater economic development.
- This will also lead to the construction of industrial corridors and logistic parks along these routes, thereby making the industrial ecosystem more competitive.
- The new corridors will permit the trains to carry higher loads, in a more reliable manner.
- These lines are also being built to maximise speeds to 100 km/hour, up from the current average freight speed of 20 km/hour. They will carry a capacity of 6,000 to 12,000 gross tonne of freight trains.
- Additionally, the DFCs will also reduce transit time from freight source to destination.
Critical economies across the world have their own DFCs.
- China’s new DFCs have been designed with the objective to link hinterland areas with ports, along with the aim to transfer commodities, raw materials, and other critical resources of production to-and-fro from the northern to the southern region.
- As per their recent plans, China aims to divorce its passenger traffic completely from its freight traffic by 2020.
- Freight Railways in America, though privately-owned, is one of the best in the world, and while some of its routes are used by passenger Amtrak service trains, it carries 4 times the freight for a single kilometre.
- While China carried 3,358 million tonnes of freight in 2015 via rail, for India the number stood at 1,220 million tonnes as late as 2018.
Clearly, for its geographic scale, India must look at China and the US as ideal examples when it comes to DFCs.
Issues with Railways Freight
(a) Highways are more feasible
- The share of roads in freight transport is more than half in India; while in China, it is only 30%.
- As more highways are getting built rapidly, the share of roads in freight transport is increasing at accelerating rate.
(b) Costly transport
- The working of Indian Railways is caught up between making it a self-sufficient organisation and serving it as a transport system for the poor. The passenger fares usually remain static for years.
- In order to keep finances in check, freight charges have been raised in the past. This discrepancy between freight charges and passenger fares seem to distort the Railways’ performance.
(c) Decline in coal freight
- Freight contributes nearly two-thirds of Indian Railway’s revenue and coal transport alone contributes to half of that.
- Decreasing dependency on coal with increasing thrust on renewable energy has crippled railway revenue from freights.
(d) Lack of finances
- Indian Railways spends heavily on revenue expenditure – there is little left for capital expenditure.
- About 94 percent of the system’s revenues are spent on operating costs and social obligations, leaving little to modernize its infrastructure.
(e) A network of delays
- The railways have been losing freight for years. Today, trains carry just 30 percent of India’s freight, down from nearly 80 percent 30 years ago.
- Most passenger and freight lines are shared, and, when there is a delay, passenger trains are always prioritized. This makes it impossible to ensure deliveries within a set time.
(f) Stuck into monopoly
- The Indian railways have lacked investment. There’s been an inability to raise passenger fares because it’s a political ideology that public transport in India needs to be accessible for everyone.
- Popular reforms aim at subsidised tariff due to political incentives. This leads to an increase in freight pricing which adds to inflation.
(g) Populist development
- Railways sometimes seem to be diverting from core issues of safety and operation and to populist needs.
- These measures are aimed at wooing corporate travellers. Rail budgets are often about new trains, bullet trains and Wifi.
Significance of DFCs
(a) Decongestion of roads
Around 70% of the freight trains currently running on the Indian Railway network are slated to shift to the freight corridors, leaving the paths open for more passenger trains. This will reduce congestion on the main tracks and enable passenger trains to move faster.
(b) Increased NTKM Capacity
The DFC shall reform the transportation sector and will create more capacity on trunk routes of Indian Railways as goods trains shall be able to run freely on DFC without any restrictions imposed by the movement of passenger trains. (NTKM stands for transportation of 1 tonne of goods over 1 km.)
(c) Improvised logistics and connectivity
Tracks on DFC are designed to carry heavier loads than most of the Indian Railways. It will connect the existing ports and industrial areas for faster movement of goods.
(d) Speed and Punctuality
To begin with, freight trains will run according to a timetable and as fast as express trains. DFCs would offer a sharp increase in the average speed of freight trains – from a frustrating 25kmph to 70kmph.
(e) Employment generation
Thousands of people will get employed in the construction of the corridor and other facilities along the corridor, including logistics parks to handle cargo and townships these corridors.
Some inevitable challenges
DFC has been a showcase project for IR in the past decade but it has suffered challenges relating to land acquisition, utility shifting, funding from multilateral and donor agencies, lack of consensus on the design and re-bidding of construction contracts.
These bottlenecks have seen the project fall behind the original timelines.
DFCs present a significant opportunity for freight logistics in India. What is important is to see how increasingly optimistic traffic projections will be realized. That depends upon the industrial and trade growth in India and the development of industrial corridors and the feeder network.
- Once DFC is operational, the average speed of freight trains will go up from 25 kmph to 70 kmph, reducing the transit time by more than half.
- Trainload would be increased almost thrice (5000 tonnes to 13,000 tonnes), ensuring an enhanced economy of scale and reduced the cost of transport.
- This will ensure a higher modal share for railways in the freight business.
- Also, the capacity released by freight trains on the existing lines can be used by IR to operate more passenger trains at higher speeds, resulting in increased revenues for the transporter.
It would also play a lead role in transforming the railways from a loss-making operation to an efficient and profitable venture. Also, it would be interesting to see the potential all these corridors hold for the regions they pass through.
- The DFCs project is the biggest leap for Indian Railways, not just because of its route length, but also because of the technology it ushers, the rail infrastructure it will enable, and the socio-economic transformation it shall result in.
- 20-30 years from now, the DFCs are going to be indispensable to India’s logistics sector. From private to public, every company would want a ride on these corridors.
If completed on a timely basis, DFC has the potential to be a game-changer not just for Indian Railways, but the trade and economics of the country. It will reduce the overall logistics cost of trade between the hinterland and gateway ports, making India a favourable destination for EXIM trade.