Eastern Dedicated Freight Corridor: What will determine PPP success

The Dedicated Freight Corridors have progressed slowly, and now, the easternmost portion of the Eastern DFC is trying to attract private interest under PPP. The 1,840 km Eastern Dedicated Freight Corridor Project (EDFC) is part of the ambitious project with a potential to create a mammoth network of freight cargo operations, and runs from Ludhiana in Punjab and ends in Dankuni in West Bengal.

The World Bank is funding up to (approximately) Rs 7,142 crore of the project cost of the 1,200 km Ludhiana-Mugalsarai stretch of the EDFC project with an estimated total project cost of (approximately) Rs 10,683 crore. The Ministry of Railways, through the Dedicated Freight Corridor Corporation of India Limited, has been actively trying to elicit interest from private-sector participants to implement the final 538 km Sonnagar-Dankuni stretch of the EDFC project on PPP at an estimated total project cost of Rs 15,000 crore. The World Bank is likely to extend support for the Son Nagar-Dankuni stretch as well.

But the ambitious project is fraught with challenges and risks both for the public and private partner. Vishnu Sudarsan and Shashank Vikram Singh of law firm J Sagar Associates identify the embedded factors that could be sticky, and suggest what to do about them.