Govt. to set up SPV for dedicated freight corridors

New Delhi, May 19 (UNI) The government today said it would set up a Special Purpose Vehicle (SPV) to plan, construct and maintain the Dedicated Freight Corridors on Eastern and Western Routes at an estimated expenditure of Rs 22,000 crore.

''The SPV, which is proposed to start functioning in 2006-07, will also be responsible for movement of trains within its jurisdiction,'' Minister of State for Railways R Velu told the Rajya Sabha in a written reply.

Mr Velu said the proposed SPV, under the administrative control of the Railway Ministry, would be a company under the Companies Act, 1956. The ministry would hold majority share in the SPV, he added.

Dedicated freight corridors -- tracks exclusively meant for super fast freight trains cruising at a speed of 100 km per hour as opposed to the 25 kmph at present -- will facilitate plying of higher axle load wagon and double stack containers.

This will not only improve the quality of rail freight services but also reduce the cost of rail transportation significantly.

The Eastern Corridor would extend from Ludhiana to Sonnagar (Bihar) while the Western Corridor would connect the Jawaharlal Nehru Port Trust in Maharashtra to Dadri in Uttar Pradesh.

A week before the presentation of the Railway Budget, The Prime inister-headed Committee on Infrastructure (CoI), had approved the Railways' Dedicated Freight Corridor Project and decided to set up a Special Purpose Vehicle (SPV) on commercial lines for its funding.

The ministry had also held consultations with the Japan Bank of International Cooperation for funding the project, pegged at an expenditure of Rs 22,000 crore. It had also entered into an agreement with a Japanese company to carry out the feasibility studies on these two corridors.

In the Railway Budget 2006-07, Mr Lalu Prasad had announced that in the first phase of the project, lines would be laid on the Ludhiana-Sonnagar route.

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