Ex-Ante Evaluation Paper (for Japanese ODA Loan)
South Asia Division 1, South Asia Department, JICA
1. Name of the ProjectCountry: India
Project: Dedicated Freight Corridor Project (Phase1) (IV)
Loan Agreement: March 27, 2020
2. Background and Necessity of the Project(1) Current State and Issues of the Railway Sector in India
While freight transportation volume has increased at an annual rate of over
10% in India, its freight volume transported by railway grew by slightly less than
2% per year from 2013 to 2017 partly because the freight transportation
capability of its railways was limited. The railway transportation share in freighttransportation has also been declining. The development and enhancement ofrailways, which allow mass transportation and are more environmentally friendly
than road transportation, is a critical issue for sustainable economic growth inIndia. Above all, the freight transportation volume on the route known as the“Golden Quadrilateral,” which connects Delhi, the capital and one of the mostimportant production and consumption areas in India, Mumbai and Kolkata, themain ports of the west and east of the continent, and Chennai in southeastern
India, accounts for about 65% of that of the whole country. Because it isexpected that the volume of container freight, and of agricultural products andmineral or industrial resources, transported on the route will continue increasing,it is required for locomotives to improve their transportation capability byincreasing their power density, speeding up, and cooperating with other meansof transportation.
In the 12th Five Year Plan (April 2012-March 2017) as well as the 11th Five
Year Plan, the Government of India gives high priority to measures for the early
development of dedicated freight railway corridors, especially between Delhi andMumbai (Western Corridor) and between Ludhiana, Delhi and Kolkata (EasternCorridor), and for the expansion of passenger and freight vehicles, aiming to
expand railways, introduce high-speed freight vehicles and improve access toport facilities for the purpose of mass transportation on arterial railways. The
latest Three Year Action Agenda (FY 2017-2019) also emphasizes theimportance of the development of transportation infrastructure, including
railways, for economic reform in India.

The West Corridor route, which is to be developed through the DedicatedFreight Corridor Project (Phase1) (hereinafter referred to as “the Project”) basedon the above-mentioned plan, passes from the state of Maharashtra (statecapital: Mumbai) on the west coast to the state of West Bengal (state capital:Kolkata) on the east coast through 10 states (whose total population is about
740 million). In particular, the western coastal region centering around Mumbai(the states of Maharashtra and Gujarat) have multiple deepwater ports andthrive on commerce and industry, while the national capital region centeredaround Delhi has a developed industry, commerce and agriculture as the biggest
consumption area in India, where the population is significantly concentrated. Itis therefore expected that the volume of container transportation on the West
Corridor between international ports on the western coast and inland areas ofdemand will increase rapidly. On the other hand, the current line capacity is only
about 50% of the line capacity required to address transportation demand for2032 and is reaching its limit. The Project aims to enhance freight transportation
capability and improve the tight line capacity by developing new dedicatedfreight routes and is ranked as an important project in the above-mentioned
development policies of the railway sector of the Government of India.
(2) Japan and JICA’s Railway Sector Policy and the Positioning of the ProjectCountry Assistance Policy for India (March 2016) indicates “the reinforcementof connectivity” as a priority area, and states that we should support thedevelopment of transportation infrastructure to create transportation hubs andnetworks in railway and other areas, aiming at the reinforcement of connectivity
within major industrial cities and economic blocs, and between regions, in India.
The JICA Country Analysis Paper for India (March 2018) also states that in thesituation where a large part of the Indian population is expected to move to themiddle class by 2030, it is necessary to “foster productive industries” in order toaddress growing consumer demand and therefore required to reinforce
connectivity, such as the development of economic corridors that improve theflow of people and goods. It concludes that the continuance and expansion of
support for infrastructure development and other areas will be required in order
to meet massive development needs and further stimulate private economicactivities. The Project is consistent with these policies and analyses.
As of the end of December 2019, Japan has approved 66 ODA loan projects
worth a total of 2,584.5 billion yen for the transportation and traffic sector of India,
among which 41 ODA loan projects worth a total of 2,041.3 billion yen are for therailway sector. In this regard, Japan provided the Project with a total of 196.5
billion yen for three terms after the L/A signing for the first term in October 2009and has approved the provision of a total of JPY 137.7 billion for two terms to theDedicated Freight Corridor Project (Phase 2) (hereinafter referred to as “ProjectPhase 2”) targeting the sections between Dadri and Rewari and between
Vadodara and Mumbai.
In addition, as for technical cooperation regarding the Project, Japan
implemented the Study on Plan for Strengthening Freight Transportation
Capability of Railways (2006-2007), the Demonstration Project regarding FreightTransportation Safety of Arterial Railways (2008) and the Support Project forOperation and Maintenance of Dedicated Freight Corridor (Phase 1)(2015-February 2018) and implements the Project for Strengthening Safety
Capacity of Indian Railways [technical assistance related to ODA loan] (for twoyears from December 2018).
(3) Other Donors’ Activities
The World Bank has provided about USD 4,361 million assistance for thedevelopment of the section between Ludhiana and Mughalsarai (1,193 km) ofthe Eastern Dedicated Freight Corridor. The Asian Development Bank has
provided the railway sector with software support, such as organizational
reformation of the Indian Railways (hereinafter referred to as the “IR”), andothers. In addition, it provided assistance to the Mumbai Metro (Lines 2A, 2B and7; approved amount: USD 926 million), the Jaipur Metro (approved amount:USD 176 million) and the Bangalore Metro (approved amount: USD 250 million).
(4) Meaning of Implementing the Project
The Project aims to realize effective freight transportation by enhancing thefreight transportation capability through the construction of new dedicated freightroutes, the adoption of automated signal and communication systems, and theintroduction of high-power and high-speed electric locomotives, being consistent
with the issues and development policies of India, and the support policies ofJapan and JICA. The Project is also expected to contribute to the SDGs Goal 9(Build resilient infrastructure). Thus, the necessity and reasonability of JICA’scontinuous support for the Project is substantial.

3. Project Description(1) Project Objective
The objective of the Project is to cope with the increase of freight transportdemand in India by constructing new dedicated freight railway system,
thereby promoting comprehensive regional economic development along thefreight corridor, through improvement and modernization of inter-modal
logistic system handling considerable freight traffic and poised for massive
growth.
(2) Project Site / Target Area
Delhi Territory and the states of Uttar Pradesh, Haryana, Rajasthan, Gujaratand Maharashtra(3) Project Components1) Civil engineering and building construction: Railbed development,construction of structures such as bridges, freight stations and junction
2)
3)

4)

5)
6)
7)

stations, and other components (international competitive bidding (tied))
Track construction: Rail laying and other components (internationalcompetitive bidding (tied))
Electrical and mechanical construction: Development of overhead lines,
substations and other components (international competitive bidding(tied))
Signal and communication construction: Development of signal andcommunication systems, and construction of automatic barrier systems(international competitive bidding (tied))
Vehicle procurement (i): Electric locomotives (produced and delivered by
the Ministry of Railways of India on a self-financing basis)
Vehicle procurement (ii): Railway maintenance and inspection vehicles,
and other components (international competitive bidding (tied))
Consulting services: Construction supervision, quality and safety control,
test-run assistance, support for planning and implementation relating tooperation and maintenance (including the provision of training programsand the review of manuals), implementation management ofenvironmental management plans and monitoring plans for resettlement,social development (such as activities for public relations and forenlightening residents, and activities for preventing HIV), and othercomponents (short-list method)

(4) Estimated Project Cost
522,654 million yen (of which, the ODA Loan amount is 130,000 million yen)(5) Schedule
October 2009 - May 2027 (212 months in total). The Project will be completed
upon the commencement of services of all facilities (May 2027).
(6) Project Implementation Structure1) Borrower: President of India
2) Guarantor: None
3) Executing Agency: Dedicated Freight Corridor Corporation of India Ltd.
(hereinafter referred to as the “DFCCIL”) and Ministry of Railways of4)India (only procurement of electric locomotives)
Operation and Maintenance System: After the completion of construction,
the DFCCIL will assume the operation and maintenance of the main line,
train operation control facilities (tracks, and signal and communication

systems) and other duties; and the IR, a subsidiary of the Ministry ofRailways of India, will assume freight transportation operation, including
the maintenance of electric locomotives.
(7) Collaboration with Other Schemes and Donors
1)
Japan’s Assistance Activity
As mentioned in section 2. (2), the Project aims to develop the section
between Delhi and Mumbai, which will cover a distance of about 1,465km, of the Western Dedicated Freight Corridor, together with the Project
Phase 2 targeting the sections between Dadri in the state of Uttar
Pradesh and Rewari in the state of Haryana, and between Vadodara in
the state of Gujarat and Mumbai in the state of Maharashtra.
In addition, through the Support Project for Operation and
Maintenance of Dedicated Freight Corridor technical cooperation, anenhancement plan has already been formulated for the operation and2)

maintenance system of the freight railway project carried out by theMinistry of Railways and the Dedicated Freight Corridor Corporation ofIndia Ltd. (hereinafter referred to as the “DFCCIL”).
Other Donors’ Assistance Activity
As well as assistance for the development of the section between
Ludhiana and Mughalsarai of the Eastern Dedicated Freight Corridor
mentioned in section 2. (3), the World Bank has provided assistance
relating to the development of business plans, marketing plans,track-access charge calculation formulas and other matters of theDFCCIL, including those for the Western Corridor.
(8) Environmental and Social Consideration / Cross-Sectoral Issues / GenderCategory1) Environmental and Social Considerations① Category: A② Reason for Categorization
The Project falls into the Railway sector and is likely to have asignificant adverse impact due to its characteristics under the JBIC
Guidelines for Confirmation of Environmental and Social
Considerations (published in April 2002, hereinafter referred to as the“JBIC Guidelines”.
③ Environmental Permit
The environmental impact assessment (EIA) report on the Project wasprepared in August 2009 and was approved by the Ministry ofRailways on August 13, 2009, though its preparation is not required
under the domestic laws of India.
④ Anti-Pollution Measures
During construction, contractors take mitigation measures, such as
dust control, proper storage of construction materials and use of
low-noise materials, in accordance with environmental management
plans. As for anti-noise measures after the commencement ofservices, mitigation measures, such as installing sound-proof walls in
densely populated areas as needed, were considered. The mitigation
measures considered in detailed designs will be reflected in detailed
environmental management plans, and contractors will take measuresaccording to the plans.
⑤ Natural Environment
Because most of the target areas are agricultural or unused land, andall wildlife sanctuaries are planned to be circumvented, it is estimatedthat an adverse impact on the natural environment will be kept to aminimum.
⑥ Social Environment
The Project requires the land acquisition of approximately 3,716 ha
and the resettlement of 1,514 households. The DFCCIL has held
discussions relating to the land acquisition and resettlement, andcompensation at replacement cost and necessary livelihood recovery
support have been implemented in accordance with a resettlement
action plan approved by the Ministry of Railways and an entitlement
matrix prepared in May 2015 according to the New Land Acquisition
Act. Procedures for the land acquisition and resettlement arescheduled to be completed by June 2020.
⑦ Other / Monitoring
In the Project, the executing agencies will implement monitoring ofnoise, vibration, soil, air quality, water quality, borrowing-pits,vegetation, land acquisition, resettlement and other through2)

contractors during construction and will also implement areas
monitoring of noise, vibration, soil and water quality after thecommencement of services.
Cross-Sectoral Issues
The Project promotes a modal shift in freight transportation from roadto rail and contributes to GHG emission reductions. The climate change
mitigation effect of the Project (rough estimate of GHG emission
reductions amount) is about 14.6 million tons per year, CO 2 equivalent.
On the other hand, the HIV infection risk will be high in the Project
because it is a large construction project for which many workers gather
at construction sites in a country where HIV infection is a concern, and it
is estimated that workers engaged in the Project include many itinerant
laborers who live alone. For that reason, the DFCCIL, an executing
agency, has developed a safety, health and environment manual,including HIV prevention measures, and taken necessary measures in
the Project. In addition, it requires contractors to cooperate in theabove-mentioned HIV prevention activities by stipulating suchcooperation in bidding documents and contracts.

3) Gender Category: ■GI (S) (Gender activity integration project)<Classification Rationale>
The Project is deemed an integrated gender activity project because
gender-equal initiatives, such as the promotion of employment ofwomen in construction work and in operating agencies, have been
agreed with the executing agencies.

(9) Other Important Issues
The Project is a STEP loan project, and Japan’s technology is applied tocomponents, such as tracks, signals and communication.
4. Target Outcomes(1) Quantitative Effects
1)
Outcomes (Operation and Effect Indicators /1)
Indicator

Baseline (2007)/2

Target (2029)[2 Years afterCompletion]

Operation rate (%)－93

Vehicle running distance (in bothdirections) (1,000 km per day)

37.9

Number of transport trains (in both33directions) (per day)

250.8
222

Transportation volume (1 milliontons/km per day) /3

55.6

Maximum speed (km per hour)

75100

Shortened transportation time (hour) /4－18.25

336.9/1: Figures based on only the section subject to the Project (between Rewari and Vadodara).
/2: As to each indicator, the current figures based on conventional lines of the IR are set as
the baseline.
/3: Railway transportation volume, excluding road transportation volume and others.
/4: The difference between the required time based on the current average speed and thatbased on the average speed in the target year.

(2) Qualitative Effects
Addressing freight transportation demand, streamlining logistics networks andpromoting extensive economic development(3) Internal Rate of ReturnAccording to the following preconditions, the Economic Internal Rate ofReturn (EIRR) of the whole Western Dedicated Freight Corridor Project(including Phase 2) will be 18.47%. The Financial Internal Rate of Return (FIRR)
will be 4.01%.
[EIRR]
Cost: Project costs and operation/maintenance costs (both excluding tax)
Benefit: Reduction effect of freight transportation costs required to addressincreasing demand
Project Life: 30 years[FIRR]
Cost: Project costs and operation/maintenance costs
Benefits: Freight receipts
Project Life: 30 years
5. External Factors and Risk Control(1)

Preconditions
・ Electric locomotives produced by the Ministry of Railways of India on aself-financing basis are delivered properly according to the schedule.
・ Personnel necessary for the operation and maintenance of the Project
are employed and trained by the DFCCIL, and the DFCCIL, IR and otherparties related to the Project appropriately cooperate with one another.

(2)

External Factors: None in particular.

6. Lessons Learned from Past Projects and Application to the Project
From the results of ex-post evaluation on the Metro Manila Strategic Mass RailTransit Dev. Project (I), (II) and (III) in the Republic of the Philippines, it is pointed
out that, when an ODA loan project is implemented, operated and maintained bypublic corporation(s), it is necessary to pay special attention to their financial
sustainability and to provide general support, including the improvement offinance and business efficiency of the executing agencies concerned.
In response to this, we have followed the enhancement of operation andmaintenance systems, including the development of financial strategies, carriedout by consultants employed by the DFCCIL, implemented the technicalcooperation mentioned in section 2. (2), and developed ideas for improving
organization control, and operation and maintenance plans, in the Project.
7. Plan for Future Evaluation(1) Indicators to be Used
As indicated in sections 4. (1) to (3).
(2) Timing of the Next Evaluation
Two years after the project completion
End