New Delhi: Uncertainty around the dedicated freight corridor (DFC) was yet to be resolved even on the eve of Japanese Prime Minister Shinzo Abe’s three-day visit to the country.
Foreign secretary Shivshankar Menon said on Monday: “It (DFC) will take some time, it is not that there will be one visit by a delegation and everybody will come here and decide that they will invest. We will hear their ideas too, we see this as a long-term strategic partnership with Japan. The DFC and DMIC (Delhi-Mumbai Industrial Corridor) are a useful step in the strategic partnership, but they are only one step in the process.”
DFC is the railway track dedicated for freight carriage that will connect New Delhi and Mumbai, while the DMIC is the industrial corridor that will come up alongside.
According to the foreign secretary, India was awaiting the feasibility report that was being prepared by Japan. “We are at the stage of designing these large projects we expect the feasibility study, and I’m told that they are on time and expect the report on time,” he said. “Until then, we can’t say.”
Mint had reported on 16 August that serious differences had cropped up between India and Japan over the cost estimates for the project. While Japan had pegged the project cost at around Rs56,0000 crore, the Indian Railways pegged it at Rs28,000 crore.
The foreign secretary also said he did not see any diminution of business interest in India from the Japanese side: “At least, I wouldn’t draw any such conclusion. The economic fundamentals of both countries are strong and comprehensive economic partnership agreement negotiations are on track. You have to recognize that these are not simple projects. They are large projects that involve supply integration, infrastructure and other changes.”
Menon also said that from the external affairs ministry’s point of view, businesses have to be involved in such massive projects. “But to say that it (DFC) should be done in two months or six months—things do not work that way. It is a process, and the fact that we are considering a project like this, with a budget of $90 billion, that we have the nerve to do so is in itself a huge achievement.”
According to railway officials concerned, the Japan International Cooperation Agency had estimated the cost for acquiring coaches locomotives for the freight corridor at Rs10,000 crore.
But the railways wanted to keep costs down and so had planned to lease them.
The railways is also setting up two joint ventures with private players at an investment of more than Rs2,000 crore. Officials say that if the order for these locomotives were to be reserved for Japanese firms, then both the existing coach factories in the public sector as well as the new units would take a hit in terms of orders.
When contacted, a top official at RITES—the survey arm of the railways—who has been part of the survey conducted by the ministry, said that they had been asked to keep out the cost for locomotives in order to make the project financing easier.