Structuring the Dedicated Freight Corridor Project A Lost Opportunity
Abstract
A new large railway project offers opportunity for structuring in a manner that best value can be
delivered towards transportation. This is more so in the context of an existing large integrated railway
system (Indian Railways (IR)) directly under the Government. The structuring issues include
ownership, role and market access, scope and design, financing, revenue and risk, and contracting
strategies. The structures on the various dimensions evolve over time, driven by different stakeholders
under an overall framework. This paper explores the evolution of two dedicated freight corridors in
India (covering a distance of around 3300 kilometers), and critique them from the perspective of
delivering the intended rail transportation. It identifies how the structures have moved in a direction
where the autonomy of DFCCIL has been reduced to make the IR the sole owner and sole customer.
The unbundling that has happened in other infrastructure sectors (aviation, maritime and road) to
bring in greater autonomy and accountability has not yet happened in the railways. There is no
unbundling of roles in terms of policy making and licensing, operations, and regulations. The critique
brings out that the structuring of DFCCIL has been a lost opportunity in terms of opening up the
railways sector.
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