DFCCIL proposes de-risking private participation in developing DFC

The Dedicated Freight Corridor Corporation of India (DFCCIL) has proposed derisking the private party developing the Sonnagar (New Chirailapauthu) to Andal section of the Eastern Dedicated Freight Corridor (DFC).

This section of the DFC will be developed by DFCCIL using a Design, Finance, Build, Operate, and Maintain & Transfer (DFBOT) approach with Public Private Partnership (PPP).

Private players expressed scepticism of projected traffic at the proposed section of the freight corridor over the 30-year contract period, according to the Managing Director at DFCCIL, R K Jain.

To address the issue, Jain said that the Indian Railways and DFCCIL will take over the traffic and tariff risk, which will reduce the risk on the concessionaire.

According to him, the concessionaire will be in charge of the project's design, construction, finance, operations, and maintenance.

The major powerhouses, industrial corridors, and Multi-Modal Logistics Parks (MMLPs) in Delhi, Haryana, Punjab, and Uttar Pradesh are expected to be served by this section. Steel traffic on the route will grow due to rising trends in finished steel consumption and production.

DFCCIL also plans to develop MMLPs, sidings, and feeder routes for last-mile connectivity along the section alignment to attract more traffic and achieve a targeted rail freight share.

The DFCCIL has been consulting with private stakeholders on how to proceed with the project.

Potential bidders are concerned that lower coal demand in the future, as more renewable energy projects emerge, will jeopardise the viability of freight operations on this route.

Another concern is that, because train operations are ultimately under the control of the railways, there may be fewer trains on the freight corridor to save money. The third source of concern was a potential alternative route, such as a parallel road route, which could eat into rail freight traffic.

According to Jain, it is proposed that the concessionaire be paid a fixed amount for operation and maintenance (O&M) fees, regardless of the amount of traffic on the route.

The bidders will compete based on the amount of money they want in exchange for their services.

He said that the concessionaire will be responsible for ensuring a daily uptime of 20 hours. He added that they would be free to hire people on their own terms.

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