World Bank offers Viability Gap Funding for last stretch of Eastern Dedicated Freight Corridor

World Bank has offered to give financial assistance to the last remaining portion of the Eastern Dedicated Freight Corridor (EDFC) between Sonnagar and Dankuni, which India is originally slated to construct in the private public-private partnership (PPP) mode.

The EDFC has also got the green signal from Railways to allow private freight trains in its corridors, if companies come forward with such propositions.

World Bank’s interest in funding the corridor’s 528-km stretch between Bihar’s Sonnagar and West Bengal’s Dankuni has now presented Indian Railways with the option to either do course correction and go for the financial assistance in the form of a viability gap funding, or carry on as planned and invite players to bring in the capital. The entire EDFC is being built with loan from World Bank, except for the last portion between Bihar and West Bengal.

The project documents detailing the PPP model for the stretch have gone to the Finance Ministry’s PPP Appraisal Committee (PPPAC). “World Bank has offered to us, because the project is very viable. But we have sent documents to the PPPAC as well. We will take a call,” Anurag Sachan, Managing Director, Dedicated Freight Corridor Corporation Limited (DFCCIL) said Friday.

“We will be floating request for qualification for private players to come forward. Now, we have this choice of going for World Bank assistance as well,” he said, adding that private players have indicated that financial closure of something like Rs 9,000 crore for, say, a stretch like Sonnagar to Gomoh, on their own might be difficult.

Atul Agarwal, Senior Transport Specialist, World Bank, said that this was a way for the bank to facilitate private players in the project. “Of course, the proposal has to formally come from the government. But what we have said is that we would be open to facilitating entry of private players in the project through viability gap funding. It is a good effort and we would be willing to help in whatever way we can,” he said.