Finance Minister Nirmala Sitharaman allocated Rs 27,482 crore to the Dedicated Freight Corridor Corporation of India (DFCC) for the financial year 2023-24 (FY24), which is 75 percent higher than the Rs 15,710.44 crore allocated for FY23.
Of the total Rs 27,482 crore of budgetary support, Rs 12,241 crore will be provided by the central government while Rs 15,241 crore will be funded through the DFCC's internal accruals, according to Budget documents.
So far in 2022-23, the government has provided Rs 14,897 crore as budget support to the DFCC, surpassing the provision of Rs 12,134.73 crore made in the Budget of 2022-23 against the central government.
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Overall, the DFCC has spent Rs 33,315.71 crore as capital expenditure in 2022-23, much higher than the Rs 12,544 crore spent in 2021-22.
The funds will mainly be used to complete the construction of the Eastern and Western Dedicated Freight Corridors (DFCs), which were earlier expected to be completed by June 2022.
The completion deadline for the DFCs was extended by two years following the pandemic-induced challenges and land acquisition delays.
So far, around 60 percent of the two DFCs of the railways are operational.
Funds allocated to DFCC will also be used to start the construction of three proposed DFCs ― East Coast corridor from Kharagpur to Vijayawada, East-West Corridor from Bhusaval to Kharagpur to Dankuni and North-South corridor from Itarsi to Vijayawada.
According to the DFCC, out of the total 2,843 km route of Eastern and Western DFC, more than 50 percent of the route work has been completed so far and 90 percent of the route is expected to be completed by the end of 2023.
A 538-km stretch between Sonnagar in Bihar and Dankuni in West Bengal is being developed in public-private partnership (PPP) mode.
The Budget has allocated Rs 17,296.84 crore for track renewal in 2023-24 vs Rs 13,335.47 crore in 2022-23, Rs 4,600 crore for gauge conversion vs Rs 2,850 crore last year, and Rs 30,749.40 crore for doubling vs Rs 12,108 crore last year. A sum of Rs 31,850 crore was allotted for new lines as well, compared to Rs 25,243 crore allotted last year.
As per the revised estimates of the central government, Rs 15,388.05 crore will be spent for track renewal, Rs 3,220 crore will be spent for gauge conversion, and Rs 24,092.66 crore will be spent for doubling in 2022-23. A sum of Rs 24,914.07 crore will be spent on setting new lines as well in 2022-23.
The national carrier will monetise the upcoming DFC assets for operations and maintenance after commissioning and the Indian Railways will have a National Rail Plan to create a ‘future ready’ Railway system by 2030.
Under Mission 3000, the Indian Railways intends to double its cargo loading to 3,000 million tonnes (mt) by 2027. It is widely understood that DFCs will play a key role in this endeavour.
DFCC will also be looking at smaller freight corridors for short distances, where the potential for revenue growth and goods loading is significant, such as corridors between ports and major mining areas.