The world bank has cleared a $650 million loan for a huge freight rail corridor that will span 1,840 kms (1,140 miles) across the northern heartland of the country.
Construction of the Eastern Dedicated Freight Corridor will help speed up the carrying of goods between Ludhiana in the west of India and Kolkata in the east, and is part of a series of new freight lines the World Bank says India needs to ease congestion on its network.
“The Indian Railways urgently needs to add freight routes to meet the growing freight traffic in India, which is projected to increase more than 7 percent annually,” Ben L. J. Eijbergen, the Task Team Leader for the project, said in a statement.
This is the third time that World Bank approved a loan for funding the freight corridor. While a loan of $975 million was cleared in 2011, a loan of $1.1 billion was cleared last year. The railway’s share of freight has fallen from 90 percent of cargo in 1950 to about 1/3rd today as the railways has struggled to expand to keep up with demand, forcing freight carriers to carry their goods by road.
Prime Minister Narendra Modi’s government, banking on big investment in infrastructure to boost the economy, approved a USD 137 billion investment plan for the railways in February. Successive governments have struggled to attract the funds necessary to upgrade roads, rail and ports across India, crimping economic growth.
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