On the growth track: What Australian varsity study says about impact of India’s Dedicated Freight Corridors

sub :Eco

sec : Infrastructure

Context:

A recent study by Australia’s University of New South Wales highlights the positive impact of Dedicated Freight Corridors (DFCs) on India’s economy and the Indian Railways’ revenue.

Study and findings:

The study analysed data from the Western Dedicated Freight Corridor (WDFC) and utilized a Computable General Equilibrium model initiated by the central government.
The study found that DFCs have reduced freight costs and travel times, leading to a decrease in commodity prices by up to 0.5%.
Additionally, DFCs contributed 94% to the revenue growth of Indian Railways between FY 2018–19 and FY 2022–23.

Dedicated Freight Corridors (DFCs):

Dedicated Freight Corridors (DFCs) are specific routes for freight transportation, which offer higher transport capacity due to the faster transit of freight trains, running of double stack container trains, and heavy haul trains.
This improves the supply chain for the industries/logistics players located at economic centres along the way, leading to growth of export-import traffic too.
The DFC initiative was first announced in Parliament during the Railway Budget for FY 2005-06, with the foundation stones for Eastern and Western corridors laid in 2006.

Key DFC Projects:

Eastern Dedicated Freight Corridor (EDFC): Spanning 1,337 km from Sonnagar in Bihar to Sahnewal in Punjab. It is complete and operational, with feeder routes connected to coal mines and thermal power plants.
Western Dedicated Freight Corridor (WDFC): Covering 1,506 km from Jawaharlal Nehru Port Terminal in Mumbai to Dadri in Uttar Pradesh. As of now, it is 93% commissioned, with feeder routes serving major cement plants and ports in Gujarat, expected to be fully operational by December 2025.

Need for DFCs:

Overutilization of Existing Rail Network: The existing railway routes, particularly the golden quadrilateral linking Delhi, Mumbai, Chennai, and Howrah, were overburdened, carrying more than 52% of passenger traffic and 58% of revenue-generating freight traffic despite constituting only 16% of the rail network.
Declining Freight Traffic Share: The Indian Railways’ share of total freight traffic was decreasing, prompting the National Rail Plan to target a rail freight share of 45% by 2030.

Recent Developments:

In March 2024, Prime Minister Narendra Modi inaugurated three new stretches of the DFC: 135-km Makarpura-Sachin section on the WDFC, 179-km Sahnewal-Pilkhani section and 222-km Pilkhani-Khurja section on the EDFC.

Current Status:

Currently, an average of 325 freight trains operate daily on the DFCs, representing a 60% increase compared to the previous year.
Since their inception, the DFCs have facilitated the transportation of over 232 billion Gross Tonne Kilometres (GTKMs) and 122 billion Net Ton Kilometres (NTKMs).
DFCs now handle over 10% of the total freight traffic of Indian Railways.

Proposed Corridors: