Cargo terminals on freight corridor run into hurdles

MUMBAI : Investors seeking to set up Private Freight Terminals (PFT) alongside the Dedicated Freight Corridor (DFC) have urged the Dedicated Freight Corridor Corporation of India Limited (DFCCIL) to remove the hurdles that are threatening to delay project implementation.

With much fanfare, the DFCCIL invited bids in November 2020 for setting up private freight terminals and logistics parks alongside 115 DFC stations. They are envisaged to enable modal shift of cargo from road to rail by routing the freight from the originating places in the hinterland to the DFCs.

“The tender was met with limited response due to the risks and uncertainties associated with the projects,” said an executive with an infrastructure firm.

The Letter of Award (LoA) issued to three successful bidders stipulate that they have to sign the formal agreement with the DFCCIL in the next few months and construct the private terminals and logistics parks over the next three years.

However, the projects are facing hurdles in the initial stage itself with rigid and inflexible clauses in the licence agreement.

The project schedules stipulated are also quite unrealistic, without taking into account the ground realities. With the tight timelines for preparation of feasibility reports and Detailed Project Reports (DPRs), the private developers are finding it difficult to properly plan for the projects, the executive said.

Developer woes

Timelines set for the freight terminals are often unsynchronised with the commissioning of the DFC along the relevant section, adding to the woes of private developers.

Another challenge is the access to the project site, which is mostly through road under bridges, which are designed to suit rural standards and do not follow the minimum norms laid down by the National Highways Authority of India (NHAI) or the Indian Roads Congress (IRC) for heavy vehicular traffic.

Private investors also say that the high land costs and inflexible contractual terms further lowered investor confidence.

“DFCCIL doesn’t provide land. If you’ve to announce the project first and then buy land, only God can save you,” the executive with the infrastructure firm mentioned earlier said.

Firms are bound by a condition to complete the private freight terminals in three years, else they will be blacklisted.

“DFCCIL must address these issues on priority to instil confidence among private investors,” the executive added.

Through the DFCs, the Indian Railways is seeking to bring about a paradigm shift in freight operations with the prime objective of lowering the unit cost of transportation by deploying higher speed and enhanced payload of freight trains.