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Freight CorridorsDedicated
Paving India’s track to Smart Growth
Knowledge Partner
YEAR July, 2014
COPYRIGHT
DISCLAIMER
CONTACTS
YES BANK Ltd.
Sanjay PalveSenior Group President & Senior MD
Tushar PandeySenior President, PSPM
Registered and Head Office
th9 Floor, Nehru Centre,Dr. Annie Besant Road,Worli, Mumbai - 400 018
Tel : +91 22 6669 9000Fax : +91 22 2497 4088
Northern Regional Office
48, Nyaya Marg, ChanakyapuriNew Delhi – 110 021
Tel : +91 11 6656 9000Email : [email protected]
[email protected] : www.yesbank.in
TITLE Dedicated Freight Corridors - Challenges & Opportunities
AUTHORS
The Associated Chambers of Commerce and Industry of India
D. S. RawatSecretary General
5, Sardar Patel MargChanakyapuriNew Delhi - 110021
Tel : +91 11 4655 0555Fax : +91 11 2301 7008/9Email : [email protected] : www.assocham.org
Public and Social Policies Management (PSPM) Group, YES BANK
Corporate Finance (CF) Group, YES BANK
No part of this publication may be reproduced in any form by photo, photoprint,
microfilm or any other means without the written permission of YES BANK Ltd. & ASSOCHAM.
This report is the publication of YES BANK Limited (“YES BANK”) & ASSOCHAM and so YES BANK & ASSOCHAM has editorial control over the content, including opinions, advice, statements, services, offers etc. that is represented in this report. However, YES BANK & ASSOCHAM will not be liable for any loss or damage caused by the reader's reliance on information obtained through this report. This report may contain third party contents and third-party resources. YES BANK & ASSOCHAM takes no responsibility for third party content, advertisements or third party applications that are printed on or through this report, nor does it take any responsibility for the goods or services provided by its advertisers or for any error, omission, deletion, defect, theft or destruction or unauthorized access to, or alteration of, any user communication. Further, YES BANK & ASSOCHAM does not assume any responsibility or liability for any loss or damage, including personal injury or death, resulting from use of this report or from any content for communications or materials available on this report. The contents are provided for your reference only.
The reader/ buyer understands that except for the information, products and services clearly identified as being supplied by YES BANK & ASSOCHAM, it does not operate, control or endorse any information, products, or services appearing in the report in any way. All other information, products and services offered through the report are offered by third parties, which are not affiliated in any manner to YES BANK & ASSOCHAM.
The reader/ buyer hereby disclaims and waives any right and/ or claim, they may have against YES BANK & ASSOCHAM with respect to third party products and services.
All materials provided in the report is provided on “As is” basis and YES BANK & ASSOCHAM makes no representation or warranty, express or implied, including, but not limited to, warranties of merchantability, fitness for a particular purpose, title or non – infringement. As to documents, content, graphics published in the report, YES BANK & ASSOCHAM makes no representation or warranty that the contents of such documents, articles are free from error or suitable for any purpose; nor that the implementation of such contents will not infringe any third party patents, copyrights, trademarks or other rights.
In no event shall YES BANK & ASSOCHAM or its content providers be liable for any damages whatsoever, whether direct, indirect, special, consequential and/or incidental, including without limitation, damages arising from loss of data or information, loss of profits, business interruption, or arising from the access and/or use or inability to access and/or use content and/or any service available in this report, even if YES BANK & ASSOCHAM is advised of the possibility of such loss.
Maps depicted in the report are graphical representation for general representation only.
YEAR July, 2014
COPYRIGHT
DISCLAIMER
CONTACTS
YES BANK Ltd.
Sanjay PalveSenior Group President & Senior MD
Tushar PandeySenior President, PSPM
Registered and Head Office
th9 Floor, Nehru Centre,Dr. Annie Besant Road,Worli, Mumbai - 400 018
Tel : +91 22 6669 9000Fax : +91 22 2497 4088
Northern Regional Office
48, Nyaya Marg, ChanakyapuriNew Delhi – 110 021
Tel : +91 11 6656 9000Email : [email protected]
[email protected] : www.yesbank.in
TITLE Dedicated Freight Corridors - Challenges & Opportunities
AUTHORS
The Associated Chambers of Commerce and Industry of India
D. S. RawatSecretary General
5, Sardar Patel MargChanakyapuriNew Delhi - 110021
Tel : +91 11 4655 0555Fax : +91 11 2301 7008/9Email : [email protected] : www.assocham.org
Public and Social Policies Management (PSPM) Group, YES BANK
Corporate Finance (CF) Group, YES BANK
No part of this publication may be reproduced in any form by photo, photoprint,
microfilm or any other means without the written permission of YES BANK Ltd. & ASSOCHAM.
This report is the publication of YES BANK Limited (“YES BANK”) & ASSOCHAM and so YES BANK & ASSOCHAM has editorial control over the content, including opinions, advice, statements, services, offers etc. that is represented in this report. However, YES BANK & ASSOCHAM will not be liable for any loss or damage caused by the reader's reliance on information obtained through this report. This report may contain third party contents and third-party resources. YES BANK & ASSOCHAM takes no responsibility for third party content, advertisements or third party applications that are printed on or through this report, nor does it take any responsibility for the goods or services provided by its advertisers or for any error, omission, deletion, defect, theft or destruction or unauthorized access to, or alteration of, any user communication. Further, YES BANK & ASSOCHAM does not assume any responsibility or liability for any loss or damage, including personal injury or death, resulting from use of this report or from any content for communications or materials available on this report. The contents are provided for your reference only.
The reader/ buyer understands that except for the information, products and services clearly identified as being supplied by YES BANK & ASSOCHAM, it does not operate, control or endorse any information, products, or services appearing in the report in any way. All other information, products and services offered through the report are offered by third parties, which are not affiliated in any manner to YES BANK & ASSOCHAM.
The reader/ buyer hereby disclaims and waives any right and/ or claim, they may have against YES BANK & ASSOCHAM with respect to third party products and services.
All materials provided in the report is provided on “As is” basis and YES BANK & ASSOCHAM makes no representation or warranty, express or implied, including, but not limited to, warranties of merchantability, fitness for a particular purpose, title or non – infringement. As to documents, content, graphics published in the report, YES BANK & ASSOCHAM makes no representation or warranty that the contents of such documents, articles are free from error or suitable for any purpose; nor that the implementation of such contents will not infringe any third party patents, copyrights, trademarks or other rights.
In no event shall YES BANK & ASSOCHAM or its content providers be liable for any damages whatsoever, whether direct, indirect, special, consequential and/or incidental, including without limitation, damages arising from loss of data or information, loss of profits, business interruption, or arising from the access and/or use or inability to access and/or use content and/or any service available in this report, even if YES BANK & ASSOCHAM is advised of the possibility of such loss.
Maps depicted in the report are graphical representation for general representation only.
thIndian Railways is the world's 4 largest Railway network, carrying the highest passenger and freight traffic in the world. The 160-year old network is poised for transformation, both technologically and functionally, with superior services, highest levels of safety measures and efficiencies and with the objective of becoming the largest freight carrier in the world.
Indian Foundation of Transport Research and Training (IFTRT) has estimated that India's transportation and logistics industry will grow annually by 15 – 20% and generate revenues of USD 385 billion by 2015. However, despite this immense potential, World Bank's Logistics Performance Index (LPI) ranks India 54 out of 155 countries. Logistics costs in India are estimated at approximately 13% of GDP, compared to 7 - 8% in developed countries and9 - 10% in other BRICS nations.
Dedicated Freight Corridors have the potential to make Indian freight transport the most cost-effective in the world. Projects such as the Diamond Quadrilateral, East-West and North-South corridors, Free Trade and Warehousing Zones (FTWZ) and private participation are critical to actualize the logistics sector's growth plans.
The Railway Budget 2014 - 15 proposes to set up Private Freight Terminals using the PPP model and has a target of 1,000 km of civil construction contracts for DFCs, to enable wider and better geographical coverage. In addition to the World Bank's USD 975 million loan agreement with the Dedicated Freight Corridor Corporation of India (DFCCIL), Indian Railways will also explore FDI for infrastructure development, which will enable efficient implementation of DFC projects.
YES BANK is committed to the development of sustainable infrastructure and a comprehensive policy framework with a future outlook of the next 20 years. In this context, I am pleased to present the YES BANK - ASSOCHAM Knowledge Report on 'Dedicated Freight Corridors: Paving India's track to Smart Growth' which highlights the key opportunities and focus areas in the sector.
I am confident that this knowledge report will be insightful and useful in realizing the true potential of DFCs in scripting India's growth story.
FOREWORD
Thank you.
Sincerely,
Rana Kapoor
President
MD & CEO
thIndian Railways is the world's 4 largest Railway network, carrying the highest passenger and freight traffic in the world. The 160-year old network is poised for transformation, both technologically and functionally, with superior services, highest levels of safety measures and efficiencies and with the objective of becoming the largest freight carrier in the world.
Indian Foundation of Transport Research and Training (IFTRT) has estimated that India's transportation and logistics industry will grow annually by 15 – 20% and generate revenues of USD 385 billion by 2015. However, despite this immense potential, World Bank's Logistics Performance Index (LPI) ranks India 54 out of 155 countries. Logistics costs in India are estimated at approximately 13% of GDP, compared to 7 - 8% in developed countries and9 - 10% in other BRICS nations.
Dedicated Freight Corridors have the potential to make Indian freight transport the most cost-effective in the world. Projects such as the Diamond Quadrilateral, East-West and North-South corridors, Free Trade and Warehousing Zones (FTWZ) and private participation are critical to actualize the logistics sector's growth plans.
The Railway Budget 2014 - 15 proposes to set up Private Freight Terminals using the PPP model and has a target of 1,000 km of civil construction contracts for DFCs, to enable wider and better geographical coverage. In addition to the World Bank's USD 975 million loan agreement with the Dedicated Freight Corridor Corporation of India (DFCCIL), Indian Railways will also explore FDI for infrastructure development, which will enable efficient implementation of DFC projects.
YES BANK is committed to the development of sustainable infrastructure and a comprehensive policy framework with a future outlook of the next 20 years. In this context, I am pleased to present the YES BANK - ASSOCHAM Knowledge Report on 'Dedicated Freight Corridors: Paving India's track to Smart Growth' which highlights the key opportunities and focus areas in the sector.
I am confident that this knowledge report will be insightful and useful in realizing the true potential of DFCs in scripting India's growth story.
FOREWORD
Thank you.
Sincerely,
Rana Kapoor
President
MD & CEO
ASSOCHAM has always been convinced that Railways can be the Growth Engine of Indian Economy. With
strategic planning, able leadership and financial restructuring, railways can boost the economy to the tune of 1%
of GDP. The current Railway budget has emphasized strongly on fast tracking the work on dedicated freight
corridors by forming National Industrial Corridor Authority for co-coordinating development of Industrial Corridor
with Smart Cities.
An efficient Railways system can revolutionize transportation and bring down the cost of doing business
substantially. The proposed six high capacity and high speed corridors along the Golden Quadrilateral and its
diagonals will bring in economic development through market-oriented industrial areas, investment regions,
industrial parks, ports and airports and six mega multi modal logistic parks at different locations along the
corridor.
DFC is a futuristic infrastructure project, connecting the ports, airports, bringing in employment and taking India
to the next level of infra-ready country for attracting more investments. A national high speed freight traffic grid
is highly capital intensive and require large scale private participation for funding and effective implementation of
the projects.
Creation of Project Formulation & Management Group similar to Railways Board will give the necessary thrust to
PPP projects. Other significant steps such as prioritizing and setting timelines for ongoing projects, strategic
partnership with various stakeholders, indigenization of products and wagon leasing market will expedite work
on important projects through PPP mode and dovetail MSME for future development. DFC has the capacity to
lead the economy into double digit economic growth, increase demand for skilled workers, revive technology
creation and boost overall socially integrated development.
ASSOCHAM along with YES BANK has come out with a study on the subject. I hope this study will be of
strategic help for the Government agencies, policy makers, industry analysts, private sector investors and other
stakeholders which can enable take off of this highly important sector.
MESSAGE
D.S. Rawat
Secretary General
ASSOCHAM has always been convinced that Railways can be the Growth Engine of Indian Economy. With
strategic planning, able leadership and financial restructuring, railways can boost the economy to the tune of 1%
of GDP. The current Railway budget has emphasized strongly on fast tracking the work on dedicated freight
corridors by forming National Industrial Corridor Authority for co-coordinating development of Industrial Corridor
with Smart Cities.
An efficient Railways system can revolutionize transportation and bring down the cost of doing business
substantially. The proposed six high capacity and high speed corridors along the Golden Quadrilateral and its
diagonals will bring in economic development through market-oriented industrial areas, investment regions,
industrial parks, ports and airports and six mega multi modal logistic parks at different locations along the
corridor.
DFC is a futuristic infrastructure project, connecting the ports, airports, bringing in employment and taking India
to the next level of infra-ready country for attracting more investments. A national high speed freight traffic grid
is highly capital intensive and require large scale private participation for funding and effective implementation of
the projects.
Creation of Project Formulation & Management Group similar to Railways Board will give the necessary thrust to
PPP projects. Other significant steps such as prioritizing and setting timelines for ongoing projects, strategic
partnership with various stakeholders, indigenization of products and wagon leasing market will expedite work
on important projects through PPP mode and dovetail MSME for future development. DFC has the capacity to
lead the economy into double digit economic growth, increase demand for skilled workers, revive technology
creation and boost overall socially integrated development.
ASSOCHAM along with YES BANK has come out with a study on the subject. I hope this study will be of
strategic help for the Government agencies, policy makers, industry analysts, private sector investors and other
stakeholders which can enable take off of this highly important sector.
MESSAGE
D.S. Rawat
Secretary General
1. Introduction
2. DFC and Regional Development
3. Issues and Recommendations
Conclusion
1.1 Indian Rail Freight Transport 2
1.2 Dedicated Freight Corridor in India 3
1.3 DFCs as growth enabler 7
2.1 Planning Interface with Freight Traffic 10
2.2 Best practices 11
2.3 Freight supportive communities 16
2.4 High density urban nodes 17
3.1 Short Term 22
3.2 Medium Term 23
3.3 Long Term 25
1
9
21
25
CONTENTS
1. Introduction
2. DFC and Regional Development
3. Issues and Recommendations
Conclusion
1.1 Indian Rail Freight Transport 2
1.2 Dedicated Freight Corridor in India 3
1.3 DFCs as growth enabler 7
2.1 Planning Interface with Freight Traffic 10
2.2 Best practices 11
2.3 Freight supportive communities 16
2.4 High density urban nodes 17
3.1 Short Term 22
3.2 Medium Term 23
3.3 Long Term 25
1
9
21
25
CONTENTS
Introduction
01
Introduction
01
2 | Dedicated Freight Corridors - Challenges & Opportunities
India's rail network is critical for the development of the economy. An efficient
transportation system is important to serve the growing demand for both
industry and passenger alike. Freight movement plays a major role in the
regional economy, shaping cities, creating jobs and generating large revenue. 1
Railways have the potential of adding at least 1% to the country's GDP .
Existing transport infrastructure has not kept pace with growth in demand.
Figure 1.1 shows that the relative share of rail in freight transport has
plummeted from 88% in 1950-51 to 31% at present.
1.1 Indian Rail Freight Transport
Figure 1.1 Freight Traffic Movement by Rail and Road
2007-082000-011990-911980-811970-711960-611950-510%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%12 14
2737 37
6167
88 86 73 64 63
39 33
Source: RITES
The modal share of railways in freight traffic is significantly lower than other
comparable countries such as China and US (Figure 1.2).
1 The Economic Times
Dedicated Freight Corridors - Challenges & Opportunities | 3
This imbalance has a negative bearing on cost as well as social and environmental
sustainability. A study conducted by Asian Institute of Transport Development (AITD) points
out that as compared to road, rail consumes 75% to 90% less energy for transporting
freight. The National Transport Development Policy Committee (2013) recommends that by
2020, Indian Railways (IR) must accommodate 46% of the total freight traffic from current
share at 31% to balance the modal mix.
Dedicated Freight Corridor (DFC) is a strategic capacity augmentation initiative to ensure
competiveness and economic integration into a provincial framework. The proposed
Diamond Quadrilateral high speed rail network will link four major metropolitan cities of
Delhi, Mumbai, Kolkata and Chennai (Figure 1.3). The network diagonals constitute less than
16% of the total route, but account for more than 50% of the passenger and freight traffic.
The sanctioned projects involve construction of 3322 kms of dedicated freight (DF) lines,
efficiently linking ports on the western corridor to the industrial hubs across the states of
Mumbai, Gujarat Rajasthan, Madhya Pradesh, Delhi and western Uttar Pradesh, and coal
and steel production centers in the east to the northern hinterland. Delhi Mumbai Industrial
Corridor (DMIC) is expected generate 2.15 lakh direct employment and 6.18 lakh indirect
jobs.
Dedicated Freight Corridor Corporation of India (DFCCIL) is a Special Purpose Vehicle
set up under the Ministry of Railways to undertake planning, mobilization of financial 2
resources, construction and development, maintenance and operation of the DFCs. ` 2.04
trillion is expected to be required for developing all 6 DFCs (Eastern, Western, North –
South, East – West, East – Coast & Southern). Incentivizing private sector to invest in
infrastructure would help spur economic development. The recently announced National
Industrial Corridor Authority aims at coordinating the development of industrial corridors
with smart cities linked to transport connectivity.
1.2 Dedicated Freight Corridor in India
Figure: 1.2 Modal Share in Freight Traffic
1 1 1
3014 6
47
48
36
2237
57
0
20
40
60
80
100
China US India
Road
Water
Rail
Air
Source: McKinsey, Building India: Transforming the Nation's Logistics Infrastructure, 2010
01 Introduction
RailRoad
2 Source: Pitroda Committee Report, 2012
2 | Dedicated Freight Corridors - Challenges & Opportunities
India's rail network is critical for the development of the economy. An efficient
transportation system is important to serve the growing demand for both
industry and passenger alike. Freight movement plays a major role in the
regional economy, shaping cities, creating jobs and generating large revenue. 1
Railways have the potential of adding at least 1% to the country's GDP .
Existing transport infrastructure has not kept pace with growth in demand.
Figure 1.1 shows that the relative share of rail in freight transport has
plummeted from 88% in 1950-51 to 31% at present.
1.1 Indian Rail Freight Transport
Figure 1.1 Freight Traffic Movement by Rail and Road
2007-082000-011990-911980-811970-711960-611950-510%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%12 14
2737 37
6167
88 86 73 64 63
39 33
Source: RITES
The modal share of railways in freight traffic is significantly lower than other
comparable countries such as China and US (Figure 1.2).
1 The Economic Times
Dedicated Freight Corridors - Challenges & Opportunities | 3
This imbalance has a negative bearing on cost as well as social and environmental
sustainability. A study conducted by Asian Institute of Transport Development (AITD) points
out that as compared to road, rail consumes 75% to 90% less energy for transporting
freight. The National Transport Development Policy Committee (2013) recommends that by
2020, Indian Railways (IR) must accommodate 46% of the total freight traffic from current
share at 31% to balance the modal mix.
Dedicated Freight Corridor (DFC) is a strategic capacity augmentation initiative to ensure
competiveness and economic integration into a provincial framework. The proposed
Diamond Quadrilateral high speed rail network will link four major metropolitan cities of
Delhi, Mumbai, Kolkata and Chennai (Figure 1.3). The network diagonals constitute less than
16% of the total route, but account for more than 50% of the passenger and freight traffic.
The sanctioned projects involve construction of 3322 kms of dedicated freight (DF) lines,
efficiently linking ports on the western corridor to the industrial hubs across the states of
Mumbai, Gujarat Rajasthan, Madhya Pradesh, Delhi and western Uttar Pradesh, and coal
and steel production centers in the east to the northern hinterland. Delhi Mumbai Industrial
Corridor (DMIC) is expected generate 2.15 lakh direct employment and 6.18 lakh indirect
jobs.
Dedicated Freight Corridor Corporation of India (DFCCIL) is a Special Purpose Vehicle
set up under the Ministry of Railways to undertake planning, mobilization of financial 2
resources, construction and development, maintenance and operation of the DFCs. ` 2.04
trillion is expected to be required for developing all 6 DFCs (Eastern, Western, North –
South, East – West, East – Coast & Southern). Incentivizing private sector to invest in
infrastructure would help spur economic development. The recently announced National
Industrial Corridor Authority aims at coordinating the development of industrial corridors
with smart cities linked to transport connectivity.
1.2 Dedicated Freight Corridor in India
Figure: 1.2 Modal Share in Freight Traffic
1 1 1
3014 6
47
48
36
2237
57
0
20
40
60
80
100
China US India
Road
Water
Rail
Air
Source: McKinsey, Building India: Transforming the Nation's Logistics Infrastructure, 2010
01 Introduction
RailRoad
2 Source: Pitroda Committee Report, 2012
4 | Dedicated Freight Corridors - Challenges & Opportunities
Western Corridor DMIC
Total Track Length: 1499/83 km
Feeder Routes: 2082 km
The total traffic is projected to grow from 44,240 million NTKM in 2007-08 to 302,544
million NTKM in 2036-37
Figure 1.3 Dedicated Freight Corridor Network
Source: DFCC
Dedicated Freight Corridors - Challenges & Opportunities | 5
P11 Investment Regions - Delineated industrial region with a minimum area of
around 200 square kilometers (20,000 hectares)
P13 Industrial Areas - Minimum area of around 100 square kilometers (10,000
hectares) for the establishment of manufacturing facilities for domestic and export
led production along with associated services and infrastructure
PAgro processing zones
P24 smart cities
DMIC Cities will help meet pressures of urbanization and also lead India’s economic
growth
PInfrastructure
1,483 km DFC, Rail links, Road connectivity, Port connectivity, Airports, Logistics
Facilities, Power supply systems.
Total Track Length:1,839 km
Feeder Routes: 2,082 km
Master Planning for Amritsar Kolkata Industrial Corridor is underway
Proposal for establishment of Industrial smart cities in seven states in this corridor
Diamond Quadrilateral Project
The Government has outlined an ambitious plan for modernization and revamping of
railways through the Diamond Quadrilateral Project which envisages connecting major
metropolitan cities with high speed trains to reduce the travelling time between cities. As
per the Railway Budget 2014-15, the Government is embarking on an ambitious plan to
have a Diamond Quadrilateral Network of High Speed Rail, connecting major Metros and
growth centers of the country. A provision of INR 100 crore has been made in this Budget
for high Speed project to RVNL / HSRC (High Speed Rail Corridor).
The Prime Minister has proposed enlisting the support of Japan and China in fast-tracking
special and hi-tech railway projects. Both the countries are believed to have the experience
Eastern Corridor DMIC
Other Proposed Corridors
Western & Eastern DMICCorridors
The Railway Budget 2014-15 lays special emphasis on DFC Project implementation of
Eastern and Western DFCs. The World Bank loan agreement for Kanpur-Mughalsarai section
of Eastern corridor of DFC will be signed in the current year for US$ 1100 million. During
2014-15, award of nearly 1000 km of civil construction contracts is targeted.
4 | Dedicated Freight Corridors - Challenges & Opportunities
Western Corridor DMIC
Total Track Length: 1499/83 km
Feeder Routes: 2082 km
The total traffic is projected to grow from 44,240 million NTKM in 2007-08 to 302,544
million NTKM in 2036-37
Figure 1.3 Dedicated Freight Corridor Network
Source: DFCC
Dedicated Freight Corridors - Challenges & Opportunities | 5
P11 Investment Regions - Delineated industrial region with a minimum area of
around 200 square kilometers (20,000 hectares)
P13 Industrial Areas - Minimum area of around 100 square kilometers (10,000
hectares) for the establishment of manufacturing facilities for domestic and export
led production along with associated services and infrastructure
PAgro processing zones
P24 smart cities
DMIC Cities will help meet pressures of urbanization and also lead India’s economic
growth
PInfrastructure
1,483 km DFC, Rail links, Road connectivity, Port connectivity, Airports, Logistics
Facilities, Power supply systems.
Total Track Length:1,839 km
Feeder Routes: 2,082 km
Master Planning for Amritsar Kolkata Industrial Corridor is underway
Proposal for establishment of Industrial smart cities in seven states in this corridor
Diamond Quadrilateral Project
The Government has outlined an ambitious plan for modernization and revamping of
railways through the Diamond Quadrilateral Project which envisages connecting major
metropolitan cities with high speed trains to reduce the travelling time between cities. As
per the Railway Budget 2014-15, the Government is embarking on an ambitious plan to
have a Diamond Quadrilateral Network of High Speed Rail, connecting major Metros and
growth centers of the country. A provision of INR 100 crore has been made in this Budget
for high Speed project to RVNL / HSRC (High Speed Rail Corridor).
The Prime Minister has proposed enlisting the support of Japan and China in fast-tracking
special and hi-tech railway projects. Both the countries are believed to have the experience
Eastern Corridor DMIC
Other Proposed Corridors
Western & Eastern DMICCorridors
The Railway Budget 2014-15 lays special emphasis on DFC Project implementation of
Eastern and Western DFCs. The World Bank loan agreement for Kanpur-Mughalsarai section
of Eastern corridor of DFC will be signed in the current year for US$ 1100 million. During
2014-15, award of nearly 1000 km of civil construction contracts is targeted.
and technology to operate bullet trains. The introduction of high-speed trains can possibly
serve to reduce congestion along highways and slow road speeds. But there is a greater
need to strike the right balance between the huge investments required and the
subsequent rise in fares due to this.
Chennai Bangalore Industrial Corridor
An upcoming mega infrastructure project is the Chennai Bangalore Corridor Project. This
corridor is planned to come up along Chennai, Sriperumbudur, Ponnapanthangal, Ranipet,
Chittoor, Bangarupalem, Palamaner, Bangarpet, Hoskote and Bangalore. This corridor is
expected to boost commerce between South India and East Asia by facilitating speedy
6 | Dedicated Freight Corridors - Challenges & Opportunities
delivery of goods between
Chennai and Ennore ports.
A comprehensive plan for
the Chennai -Bangalore
Industrial Corridor is being
p r e p a r e d b y t h e
Department of Industrial
Policy and Promotion (DIPP)
and the Japan International
Cooperation Agency (JICA).
Th i s c o r r i d o r w i l l b e
developed in collaboration with the Governments of Tamil Nadu, Andhra Pradesh and
Karnataka.
The Government of Karnataka has also proposed to extend this corridor to Mangalore while
relocating to connect a West Seaport to an East Seaport. Therefore, the corridor will serve
two seaports with three international airports and many manufacturing industries.
This extension would have great implications on the economy’s development as Mangalore
has India’s biggest Petrochemical complex, international air cargo facility, international airport
and major seaport. It also has the highest literacy rate in India and is a major export hub for
Japanese companies for exports to countries in Africa and West Asia.
This paper aims at understanding and enhancing the relationship between freight and
logistics, and urban and regional planning systems.
DFC can cater to the need of multi-faceted Indian economy, ranging from agriculture to
manufacturing and knowledge economy businesses.
The efficiency in all links of the logistics chain is vital to reduce cost of goods to a practical
minimum. Logistics clearly has a very fundamental spatial dimension which requires
efficient connectivity with rail nodes, ports, airports and local and regional transport
network. This initiative will also have major implications on achieving low-carbon
development goals.
1.3 DFCs as growth enabler
Source: DFCCIL
Dedicated Freight Corridors - Challenges & Opportunities | 7
and technology to operate bullet trains. The introduction of high-speed trains can possibly
serve to reduce congestion along highways and slow road speeds. But there is a greater
need to strike the right balance between the huge investments required and the
subsequent rise in fares due to this.
Chennai Bangalore Industrial Corridor
An upcoming mega infrastructure project is the Chennai Bangalore Corridor Project. This
corridor is planned to come up along Chennai, Sriperumbudur, Ponnapanthangal, Ranipet,
Chittoor, Bangarupalem, Palamaner, Bangarpet, Hoskote and Bangalore. This corridor is
expected to boost commerce between South India and East Asia by facilitating speedy
6 | Dedicated Freight Corridors - Challenges & Opportunities
delivery of goods between
Chennai and Ennore ports.
A comprehensive plan for
the Chennai -Bangalore
Industrial Corridor is being
p r e p a r e d b y t h e
Department of Industrial
Policy and Promotion (DIPP)
and the Japan International
Cooperation Agency (JICA).
Th i s c o r r i d o r w i l l b e
developed in collaboration with the Governments of Tamil Nadu, Andhra Pradesh and
Karnataka.
The Government of Karnataka has also proposed to extend this corridor to Mangalore while
relocating to connect a West Seaport to an East Seaport. Therefore, the corridor will serve
two seaports with three international airports and many manufacturing industries.
This extension would have great implications on the economy’s development as Mangalore
has India’s biggest Petrochemical complex, international air cargo facility, international airport
and major seaport. It also has the highest literacy rate in India and is a major export hub for
Japanese companies for exports to countries in Africa and West Asia.
This paper aims at understanding and enhancing the relationship between freight and
logistics, and urban and regional planning systems.
DFC can cater to the need of multi-faceted Indian economy, ranging from agriculture to
manufacturing and knowledge economy businesses.
The efficiency in all links of the logistics chain is vital to reduce cost of goods to a practical
minimum. Logistics clearly has a very fundamental spatial dimension which requires
efficient connectivity with rail nodes, ports, airports and local and regional transport
network. This initiative will also have major implications on achieving low-carbon
development goals.
1.3 DFCs as growth enabler
Source: DFCCIL
Dedicated Freight Corridors - Challenges & Opportunities | 7
Figure . 1.4 DFC as a Growth Enabler
Infrastructure addition
Reduce Unit cost
Seamless Connectivity
IT Packaging
Dedicated Freight Corridor
Increase share in freight
Market
Reduce cost of goods
and services
Employment Generation
Migration
Contribute to GDP
ECONOMIC DEVELOPMENT
LOW CARBON GROWTH
Smart Cities
INCLUSIVE
DEVELOPMENT
Cater to Housing and
Infra needs
Skill centers
Increase Exports, further
contributing to GDP
Reduce
fuel req.
Development of Economic
Zones
8 | Dedicated Freight Corridors - Challenges & Opportunities
Dedicated Freight Corridor and Regional Development
02
Source: YES BANK Analysis
Figure . 1.4 DFC as a Growth Enabler
Infrastructure addition
Reduce Unit cost
Seamless Connectivity
IT Packaging
Dedicated Freight Corridor
Increase share in freight
Market
Reduce cost of goods
and services
Employment Generation
Migration
Contribute to GDP
ECONOMIC DEVELOPMENT
LOW CARBON GROWTH
Smart Cities
INCLUSIVE
DEVELOPMENT
Cater to Housing and
Infra needs
Skill centers
Increase Exports, further
contributing to GDP
Reduce
fuel req.
Development of Economic
Zones
8 | Dedicated Freight Corridors - Challenges & Opportunities
Dedicated Freight Corridor and Regional Development
02
Source: YES BANK Analysis
Why plan for DFC interface?
Fr e i g h t m ove m e n t a n d
logistics significantly shape
urban deve lopment and
character ize strategical ly
located industr ia l areas.
Coordinating land use planning
with transportation is essential
t o c rea te an e ff i c i en t ,
competitive and sustainable
economy.
An integrated approach to land use and transport planning can improve
multi-modal transportation and demand management, decrease traffic
congestion, lower capital and maintenance costs, address future transport
system requirement, reduce pollution as well as provide the opportunity for
better quality-of-life.
Dynamic planning that recognizes not only the requirements for appropriate
sites but also the spatial relationships between the major freight hubs and
transport links to and from distribution centres is important to induce large
volumes of additional freight traffic for the DFC. Time-sensitive strategic
network efficiency is critical to ensure success of the project.
2.1 Planning Interface with Freight Traffic
10 | Dedicated Freight Corridors - Challenges & Opportunities
Freight Mobility Enhance movement of raw material and finished products
Reduce transportation and logistics cost
Connectivity with global markets
Time-sensitive freight
Land Use Regional economic opportunity
Transit Oriented Development (TOD)
Affordable housing
Multimodal Terminals Competitive intermodal hubs – attract business
value added business
Traffic Flows Balance competing interest – freight and passenger
Access Improve hinterland connectivity
Improve commodity basket and include non-bulk
freight business
DFC Impact
2.2 Best practices
1. Freight-Supportive Guidelines (Draft), Government of Ontario, Canada, June 2013
This comprehensive document provides planning authorities with ideas, tools and best
practices for transportation and land use planning simultaneously in their local decision-
making to help create more freight-supportive communities.
Key features:
a) Freight Consolidation Centers
Freight Consolidation Centers primarily aim at reducing the inefficient single deliveries
catering to smaller truck loads by consolidating loads delivering to common destinations
and facilitating:
PReduced number of trips
PLower overall costs for the freight industry and their customers
PLesser congestion on roads due to fewer vehicles traveling.
To increase the effectiveness of the freight consolidation centers, low impact vehicles can
be used for the final delivery journey. A relevant example is the Heathrow Consolidation
Center that facilitates significant reductions in congestion and carbon emissions at an
airport that is believed to be the busiest airport in Europe.
Dedicated Freight Corridors - Challenges & Opportunities | 11
02Dedicated Freight Corridor and Regional Development
Why plan for DFC interface?
Fr e i g h t m ove m e n t a n d
logistics significantly shape
urban deve lopment and
character ize strategical ly
located industr ia l areas.
Coordinating land use planning
with transportation is essential
t o c rea te an e ff i c i en t ,
competitive and sustainable
economy.
An integrated approach to land use and transport planning can improve
multi-modal transportation and demand management, decrease traffic
congestion, lower capital and maintenance costs, address future transport
system requirement, reduce pollution as well as provide the opportunity for
better quality-of-life.
Dynamic planning that recognizes not only the requirements for appropriate
sites but also the spatial relationships between the major freight hubs and
transport links to and from distribution centres is important to induce large
volumes of additional freight traffic for the DFC. Time-sensitive strategic
network efficiency is critical to ensure success of the project.
2.1 Planning Interface with Freight Traffic
10 | Dedicated Freight Corridors - Challenges & Opportunities
Freight Mobility Enhance movement of raw material and finished products
Reduce transportation and logistics cost
Connectivity with global markets
Time-sensitive freight
Land Use Regional economic opportunity
Transit Oriented Development (TOD)
Affordable housing
Multimodal Terminals Competitive intermodal hubs – attract business
value added business
Traffic Flows Balance competing interest – freight and passenger
Access Improve hinterland connectivity
Improve commodity basket and include non-bulk
freight business
DFC Impact
2.2 Best practices
1. Freight-Supportive Guidelines (Draft), Government of Ontario, Canada, June 2013
This comprehensive document provides planning authorities with ideas, tools and best
practices for transportation and land use planning simultaneously in their local decision-
making to help create more freight-supportive communities.
Key features:
a) Freight Consolidation Centers
Freight Consolidation Centers primarily aim at reducing the inefficient single deliveries
catering to smaller truck loads by consolidating loads delivering to common destinations
and facilitating:
PReduced number of trips
PLower overall costs for the freight industry and their customers
PLesser congestion on roads due to fewer vehicles traveling.
To increase the effectiveness of the freight consolidation centers, low impact vehicles can
be used for the final delivery journey. A relevant example is the Heathrow Consolidation
Center that facilitates significant reductions in congestion and carbon emissions at an
airport that is believed to be the busiest airport in Europe.
Dedicated Freight Corridors - Challenges & Opportunities | 11
02Dedicated Freight Corridor and Regional Development
b) Linking Critical Freight Facilities
A good example of critical linkages in freight facilities has been the Alameda Corridor which
is a dedicated rail corridor in Los Angeles. It primarily links the Ports of Los Angeles and
Long Beach with the main railway yard in downtown Los Angeles, nearly 32 kilometers
north of the ports.
The key advantages of such linkages include:
PExpanded transport capacity of freight between ports and downtown yards/docks
PReliable means of speedily delivering freight across ports and rail lines.
PImproved mobility on local street networks and reduced delays leading to decreased
air pollution
c) Regional Freight Plan
Regional freight plans mainly encompass freight strategy toolkits that aid implementation of
action plans to achieve specific goals. For instance, the Portland, Oregon metropolitan area
plays a very critical role in transporting freight across northwestern United States through
its international airport, seaport, and multiple interstate highways and rail connections.
The Regional Freight Plan focuses on achieving the following objective:
PMultimodal system planning for freight mobility and access
PSystem management to increase network efficiency
PPublic understanding of freight and goods movement issues
PSustainable freight transportation systems
PFreight-sensitive land use planning
PStrategic transportation investments
d) Route Designation Policy
The Route Designation Policy is a successful example of harmonizing freight transportation.
For instance, the City of Ottawa prepared a Truck Routes Designation Policy in October
2005. This policy was aimed at harmonizing truck routes and bringing the entire city under
12 | Dedicated Freight Corridors - Challenges & Opportunities
one standard policy. It clearly delineated the criteria for assessing current and proposed
road links for their suitability as designated truck routes. This entailed system criteria;
physical characteristics of the road; and environmental criteria.
Some of the vital features of the policy include:
PClearly designated truck routes for both urban and rural portions of the city
Pü Indications for full loads and restricted loads are given for truck routes
PTruck routes are incorporated into the Transportation Master Plan (TMP) and undergo
a comprehensive review as part of each TMP update
PTruck route maps are updated annually based on current pavement and structure
condition and/or new construction
This guide outlines principles that can be used by urban planners, freight transport
companies and other supply chain parties to improve the sustainability of urban freight
transport systems, including measures that may be implemented to improve the flows of
products in urban areas and reduce the environmental impact of the operation. It addresses
details of goods loading, 'last mile' considerations, and design principles for urban logistics
distribution nodes (called urban consolidation centres).
Key features:
a) Goods vehicle access and loading/unloading in urban areas
PRoad lanes designated for lorry use could help to reduce delays and improve journey
time reliability
PThe introduction of environmentally-friendly vehicles (EFV) into urban transport can
help reduce health problems associated with air pollution including premature
mortality, aggravation of respiratory and cardiovascular disease, asthma, bronchitis,
and decreased lung function
PPPPs in urban freight transport can be effectively used for financing, building and
operating infrastructure projects, as well as negotiating and setting of framework
conditions and agreements between the public and private sectors
2. Guide on Urban Freight Transport, BESTUFS, Netherlands, 2007
Dedicated Freight Corridors - Challenges & Opportunities | 13
b) Linking Critical Freight Facilities
A good example of critical linkages in freight facilities has been the Alameda Corridor which
is a dedicated rail corridor in Los Angeles. It primarily links the Ports of Los Angeles and
Long Beach with the main railway yard in downtown Los Angeles, nearly 32 kilometers
north of the ports.
The key advantages of such linkages include:
PExpanded transport capacity of freight between ports and downtown yards/docks
PReliable means of speedily delivering freight across ports and rail lines.
PImproved mobility on local street networks and reduced delays leading to decreased
air pollution
c) Regional Freight Plan
Regional freight plans mainly encompass freight strategy toolkits that aid implementation of
action plans to achieve specific goals. For instance, the Portland, Oregon metropolitan area
plays a very critical role in transporting freight across northwestern United States through
its international airport, seaport, and multiple interstate highways and rail connections.
The Regional Freight Plan focuses on achieving the following objective:
PMultimodal system planning for freight mobility and access
PSystem management to increase network efficiency
PPublic understanding of freight and goods movement issues
PSustainable freight transportation systems
PFreight-sensitive land use planning
PStrategic transportation investments
d) Route Designation Policy
The Route Designation Policy is a successful example of harmonizing freight transportation.
For instance, the City of Ottawa prepared a Truck Routes Designation Policy in October
2005. This policy was aimed at harmonizing truck routes and bringing the entire city under
12 | Dedicated Freight Corridors - Challenges & Opportunities
one standard policy. It clearly delineated the criteria for assessing current and proposed
road links for their suitability as designated truck routes. This entailed system criteria;
physical characteristics of the road; and environmental criteria.
Some of the vital features of the policy include:
PClearly designated truck routes for both urban and rural portions of the city
Pü Indications for full loads and restricted loads are given for truck routes
PTruck routes are incorporated into the Transportation Master Plan (TMP) and undergo
a comprehensive review as part of each TMP update
PTruck route maps are updated annually based on current pavement and structure
condition and/or new construction
This guide outlines principles that can be used by urban planners, freight transport
companies and other supply chain parties to improve the sustainability of urban freight
transport systems, including measures that may be implemented to improve the flows of
products in urban areas and reduce the environmental impact of the operation. It addresses
details of goods loading, 'last mile' considerations, and design principles for urban logistics
distribution nodes (called urban consolidation centres).
Key features:
a) Goods vehicle access and loading/unloading in urban areas
PRoad lanes designated for lorry use could help to reduce delays and improve journey
time reliability
PThe introduction of environmentally-friendly vehicles (EFV) into urban transport can
help reduce health problems associated with air pollution including premature
mortality, aggravation of respiratory and cardiovascular disease, asthma, bronchitis,
and decreased lung function
PPPPs in urban freight transport can be effectively used for financing, building and
operating infrastructure projects, as well as negotiating and setting of framework
conditions and agreements between the public and private sectors
2. Guide on Urban Freight Transport, BESTUFS, Netherlands, 2007
Dedicated Freight Corridors - Challenges & Opportunities | 13
b) Last Mile Solutions
PIn the case of unattended delivery systems, use of controlled access systems and
creation of collection points can prove to be effective and reduce time and costs
associated with door to door delivery services
PUse of vehicle routing and scheduling systems, GPS route navigation systems, and
access to real time traffic information can make freight delivery more efficient.
c) Urban Consolidation Centers (UCCs)
PUCCs have multifaceted advantages including reductions in the number of vehicle
trips and vehicle kilometers, potential reduction in number of drops, better loading
and unloading facilities, ability to separate trunk movements from local deliveries,
improvements in volume/weight utilization of vehicles, reduced unit cost of
transportation and opportunities for revenue earning return loads.
PUCCs also facilitate reductions in fuel consumptions, emissions and pollution,
thereby offering social and environmental benefits.
The Canterbury Region in South Island has established an efficient freight route and freight
hub system.
Key features:
a) Community and Industry Communication
The regional coordination of transport activities is attained through the Regional Land
Transport Strategy (RLTS) managed by the Canterbury Regional Land Transport Committee
(RLTC), in particular the Technical Officers Group (TOG). A synchronized approach is achieved
through a plan that identifies freight transport matters and prioritizes it throughout the
region.
The main objectives of the Plan are as follows:
PProvide an implementation framework
PCreate a regional picture of transport and land use
PDevelop advocacy and planning tools
3. Best Practice in Freight Transport Operations, Environment Canterbury, New
Zealand 2008
14 | Dedicated Freight Corridors - Challenges & Opportunities
PAssist with input into regional funding allocation discussions
PProvide information and content for the RLTS
b) Identification of Freight Routes
The Canterbury Freight Working Group focuses on clearly identifying freight routes that are
logical and direct, with links between ports and freight zones. The Freight Action plan
recognizes the critical issues and puts actions in place to seamlessly define and protect the
operation of and access to the strategic network.
c) Identifying and strategically locating freight hubs
Key practices include:
PIdentifying freight hubs that are located in industrial areas on the perimeter of the city
PEnsuring adequate access to the State Highway networks in tandem with the
identification of freight routes
PReducing freight movement through urban areas supports best practice goals of
improved safety, accessibility and pollution. Hubs linked to highways and ports by
freight routes separate the freight movement away from schools, recreational areas
and dormitory suburbs. The enhanced community safety profile greatly reduces the
risk of harm
PPartial mode separation improves accessibility for freight operators and businesses.
There is an overall reduction in noise pollution, or at least a concentration along
known corridors and in zoned industrial areas, and benefits the community in general
PFreight routes and hubs that have a degree of separation from residential and
recreational areas enable freight activity at night and during the weekend without
restriction
d) Distribution Best Practices
As far as distribution of freight is concerned, emphasis has been laid on the following:
PEncourage discussions between major warehouses and interregional transport
companies for decreasing overall cost of delivery, congestion, emissions and
increasing the efficiency of delivery
PAssist operators to deliver efficiently through enforcement of delivery zones, site
accessibility and 'clearways'
PEnsure that any new storage and retail infrastructure adequately allows for delivery
vehicles
Dedicated Freight Corridors - Challenges & Opportunities | 15
b) Last Mile Solutions
PIn the case of unattended delivery systems, use of controlled access systems and
creation of collection points can prove to be effective and reduce time and costs
associated with door to door delivery services
PUse of vehicle routing and scheduling systems, GPS route navigation systems, and
access to real time traffic information can make freight delivery more efficient.
c) Urban Consolidation Centers (UCCs)
PUCCs have multifaceted advantages including reductions in the number of vehicle
trips and vehicle kilometers, potential reduction in number of drops, better loading
and unloading facilities, ability to separate trunk movements from local deliveries,
improvements in volume/weight utilization of vehicles, reduced unit cost of
transportation and opportunities for revenue earning return loads.
PUCCs also facilitate reductions in fuel consumptions, emissions and pollution,
thereby offering social and environmental benefits.
The Canterbury Region in South Island has established an efficient freight route and freight
hub system.
Key features:
a) Community and Industry Communication
The regional coordination of transport activities is attained through the Regional Land
Transport Strategy (RLTS) managed by the Canterbury Regional Land Transport Committee
(RLTC), in particular the Technical Officers Group (TOG). A synchronized approach is achieved
through a plan that identifies freight transport matters and prioritizes it throughout the
region.
The main objectives of the Plan are as follows:
PProvide an implementation framework
PCreate a regional picture of transport and land use
PDevelop advocacy and planning tools
3. Best Practice in Freight Transport Operations, Environment Canterbury, New
Zealand 2008
14 | Dedicated Freight Corridors - Challenges & Opportunities
PAssist with input into regional funding allocation discussions
PProvide information and content for the RLTS
b) Identification of Freight Routes
The Canterbury Freight Working Group focuses on clearly identifying freight routes that are
logical and direct, with links between ports and freight zones. The Freight Action plan
recognizes the critical issues and puts actions in place to seamlessly define and protect the
operation of and access to the strategic network.
c) Identifying and strategically locating freight hubs
Key practices include:
PIdentifying freight hubs that are located in industrial areas on the perimeter of the city
PEnsuring adequate access to the State Highway networks in tandem with the
identification of freight routes
PReducing freight movement through urban areas supports best practice goals of
improved safety, accessibility and pollution. Hubs linked to highways and ports by
freight routes separate the freight movement away from schools, recreational areas
and dormitory suburbs. The enhanced community safety profile greatly reduces the
risk of harm
PPartial mode separation improves accessibility for freight operators and businesses.
There is an overall reduction in noise pollution, or at least a concentration along
known corridors and in zoned industrial areas, and benefits the community in general
PFreight routes and hubs that have a degree of separation from residential and
recreational areas enable freight activity at night and during the weekend without
restriction
d) Distribution Best Practices
As far as distribution of freight is concerned, emphasis has been laid on the following:
PEncourage discussions between major warehouses and interregional transport
companies for decreasing overall cost of delivery, congestion, emissions and
increasing the efficiency of delivery
PAssist operators to deliver efficiently through enforcement of delivery zones, site
accessibility and 'clearways'
PEnsure that any new storage and retail infrastructure adequately allows for delivery
vehicles
Dedicated Freight Corridors - Challenges & Opportunities | 15
2.3 Freight supportive communities
Integrated development: Emerging
Landscape for Global Investment
DMIC aims at creating a high impact
development area spanning a distance
of 150 kms on either side of the
corridor. This will provide the necessary
momentum to push industrial growth in
the region. It is expected that the
industrial output would triple in nine
years, whereas regional employment
and exports would double in seven
years in the DMIC region.
It is imperative for the Government to
frame a strategic plan for inclusive
growth through resource assessment.
1. Geographical appellation –
vanguard of local development
Geographical appellation can push
demand and growth of traditional skills
(i.e. agriculture, S&ME etc.) and related industries that can cater to global markets, and
place DMIC as a preferred investment region, thereby, boosting foreign investment.
Action Point: Expand potential for freight business
Create institutional arrangement to cater to smaller parcel size. This will help railways to gain
access to high potential market like consumer durables, fast moving consumer goods
(FMCG) and containerized cargo.
2. Skill development
Skill development can provide the fillip towards employment generation; leveraging the
demographic dividend and ensuring inclusive development. Around 50 advanced skill
development facilities are proposed to be established in the DMIC region on Hub and Spoke
model in active partnership with private sector.
Overhaul of India’s corporate law and mandatory corporate social responsibility (CSR)
proposal that extends 2% of a company’s profit averaged over the last three years towards
Source: DFCCIL
Figure 2.1 . Influence Region of DMIC
16 | Dedicated Freight Corridors - Challenges & Opportunities
socially responsible initiative can be creatively adopted towards promoting the interests of
the local community in DMIC region.
Action Point: Incorporating skill development and social equity with the wave of SEZ reforms
can open doors of inclusive growth by recognizing the aspirations of the local community.
Special programs, designed to connect local economy to global markets should also be
framed.
3. Boost Domestic Production
Micro Small and Medium Enterprises
(MSME) has emerged as a robust and
vibrant sector of the economy. MSMEs
employ over 40% of the (industrial?)
workforce, and have the potential to
significantly absorb increase in population in
the country’s working age bracket.
Action Points:
PSt andard i za t ion : MSMEs a re
complementary to large industries.
Po l i cy f r amework a im ing a t
standardization of products will
improve supply chain, and also
dovetail MSME and private sector
for future rail development
PMarketing Support: Marketing is critical for the growth and survival of micro, small
and medium enterprises. Institutional support and training centers focusing on
enhancing marketing capabilities will ensure competitiveness of MSMEs
Intra-city planning to facilitate freight movement
Establish linkages between freight movement and land use planning policy and practice.
PRoute designation policy
PAccess to highway and Ro-Ro facility
2.4 High density urban nodes
Figure 2.2 Link interface for Skill Development
Dedicated Freight Corridors - Challenges & Opportunities | 17
Government/ Policy
Industry
Academia
2.3 Freight supportive communities
Integrated development: Emerging
Landscape for Global Investment
DMIC aims at creating a high impact
development area spanning a distance
of 150 kms on either side of the
corridor. This will provide the necessary
momentum to push industrial growth in
the region. It is expected that the
industrial output would triple in nine
years, whereas regional employment
and exports would double in seven
years in the DMIC region.
It is imperative for the Government to
frame a strategic plan for inclusive
growth through resource assessment.
1. Geographical appellation –
vanguard of local development
Geographical appellation can push
demand and growth of traditional skills
(i.e. agriculture, S&ME etc.) and related industries that can cater to global markets, and
place DMIC as a preferred investment region, thereby, boosting foreign investment.
Action Point: Expand potential for freight business
Create institutional arrangement to cater to smaller parcel size. This will help railways to gain
access to high potential market like consumer durables, fast moving consumer goods
(FMCG) and containerized cargo.
2. Skill development
Skill development can provide the fillip towards employment generation; leveraging the
demographic dividend and ensuring inclusive development. Around 50 advanced skill
development facilities are proposed to be established in the DMIC region on Hub and Spoke
model in active partnership with private sector.
Overhaul of India’s corporate law and mandatory corporate social responsibility (CSR)
proposal that extends 2% of a company’s profit averaged over the last three years towards
Source: DFCCIL
Figure 2.1 . Influence Region of DMIC
16 | Dedicated Freight Corridors - Challenges & Opportunities
socially responsible initiative can be creatively adopted towards promoting the interests of
the local community in DMIC region.
Action Point: Incorporating skill development and social equity with the wave of SEZ reforms
can open doors of inclusive growth by recognizing the aspirations of the local community.
Special programs, designed to connect local economy to global markets should also be
framed.
3. Boost Domestic Production
Micro Small and Medium Enterprises
(MSME) has emerged as a robust and
vibrant sector of the economy. MSMEs
employ over 40% of the (industrial?)
workforce, and have the potential to
significantly absorb increase in population in
the country’s working age bracket.
Action Points:
PSt andard i za t ion : MSMEs a re
complementary to large industries.
Po l i cy f r amework a im ing a t
standardization of products will
improve supply chain, and also
dovetail MSME and private sector
for future rail development
PMarketing Support: Marketing is critical for the growth and survival of micro, small
and medium enterprises. Institutional support and training centers focusing on
enhancing marketing capabilities will ensure competitiveness of MSMEs
Intra-city planning to facilitate freight movement
Establish linkages between freight movement and land use planning policy and practice.
PRoute designation policy
PAccess to highway and Ro-Ro facility
2.4 High density urban nodes
Figure 2.2 Link interface for Skill Development
Dedicated Freight Corridors - Challenges & Opportunities | 17
Government/ Policy
Industry
Academia
Optimum utilization and sustainable development of land and resources
Corridors such as DMIC offers an unique opportunity to facilitate growth in the real estate
sector as investments in infrastructure and industry can be efficiently utilized for overall
regional development. The corridor is expected to generate 3 million jobs which will
definitely boost the demand for real estate and affordable housing.
Figure 2.3 Master Plan of Smart City – Dholera Special Investment Region
Source: DFCCIL
18 | Dedicated Freight Corridors - Challenges & Opportunities
Another example is that of Hong Kong
• Government has granted 'Land Development Rights' to Mass Transit Railway (MTR),
for which MTR pays premium to the Government.
• Value enhancement in property developed by MTR in partnership with the private
sector is used to finance new rail infrastructure.
• High density settlement around transit lines encourages transit ridership.
The process helps in maximizing the land development potential and ensures sustainable
development.
Compatible Neighborhoods – TOD
TOD encourages high density settlement and modal shift to mass transit systems, thereby
reducing emissions and improving the overall efficiency of cities.
Flexible planning and infrastructure that can adapt overtime to keep pace with population
increase is essential to harvest the potential benefits of TOD.
Dedicated Freight Corridors - Challenges & Opportunities | 19
Railway and Real Estate
Taking cue from development in Japan
• In greater Tokyo, suburban rail services are operated by private railway companies
which have diversified over time to include businesses operations closely related to
the railway industry, including real estate development, retailing, and bus
operations.
• Land for future expansion
Other innovative steps to assemble the land needed for real estate development
included “land readjustment” policy. In this approach, rather than acquiring all of the
land, the rail company organizes landowners to form a cooperative that consolidates
properties, redevelops them without transferring ownership, and returns smaller but
fully serviced parcels to landowners.
Optimum utilization and sustainable development of land and resources
Corridors such as DMIC offers an unique opportunity to facilitate growth in the real estate
sector as investments in infrastructure and industry can be efficiently utilized for overall
regional development. The corridor is expected to generate 3 million jobs which will
definitely boost the demand for real estate and affordable housing.
Figure 2.3 Master Plan of Smart City – Dholera Special Investment Region
Source: DFCCIL
18 | Dedicated Freight Corridors - Challenges & Opportunities
Another example is that of Hong Kong
• Government has granted 'Land Development Rights' to Mass Transit Railway (MTR),
for which MTR pays premium to the Government.
• Value enhancement in property developed by MTR in partnership with the private
sector is used to finance new rail infrastructure.
• High density settlement around transit lines encourages transit ridership.
The process helps in maximizing the land development potential and ensures sustainable
development.
Compatible Neighborhoods – TOD
TOD encourages high density settlement and modal shift to mass transit systems, thereby
reducing emissions and improving the overall efficiency of cities.
Flexible planning and infrastructure that can adapt overtime to keep pace with population
increase is essential to harvest the potential benefits of TOD.
Dedicated Freight Corridors - Challenges & Opportunities | 19
Railway and Real Estate
Taking cue from development in Japan
• In greater Tokyo, suburban rail services are operated by private railway companies
which have diversified over time to include businesses operations closely related to
the railway industry, including real estate development, retailing, and bus
operations.
• Land for future expansion
Other innovative steps to assemble the land needed for real estate development
included “land readjustment” policy. In this approach, rather than acquiring all of the
land, the rail company organizes landowners to form a cooperative that consolidates
properties, redevelops them without transferring ownership, and returns smaller but
fully serviced parcels to landowners.
Issues and Recommendations
03
Issues and Recommendations
03
DFCs are envisioned to create sophisticated infrastructure to trigger economic
development, inject foreign investment and attain sustainable development.
However, infrastructure development along DFCs is hampered by delayed
clearances, cost overruns, land acquisition and financing problems. Hence,
timely delivery of the projects is essential to realize the full potential of the
DFC strategic plan.
Land acquisition remains the biggest hurdle, impeding the pace of
development and industrialization.
a. Rail linked ICDs - Private participation in creating freight terminal
infrastructure along the DFCs is critical to ensure last-mile linkage.
The new Land Acquisition Act will increase costs and time required
to setup ICDs.
b. Suitable amendments to the acquisition policy and focused
interventions such as landowner cooperatives can minimize
resistance from the affected families and help expedite infra
projects.
Complicated procedures and uncertainties deter investment and delay
execution. Stable macro-economic regime and simplification of
regulatory and taxation process (including GST)are important to meet
the projects' needs.
3.1 Short Term
1. Land acquisition
2. Policy Regime
22 | Dedicated Freight Corridors - Challenges & Opportunities Dedicated Freight Corridors - Challenges & Opportunities | 23
DFCs are capital intensive and have very long gestation periods due to which they
appear financially unviable at commercial funding rates. This makes them overly
dependent on funding from the Government and multi-lateral agencies. There is need
to draw more financial commitment from States and private sector (both domestic
and foreign, especially pension funds) to sustain financing in long-term.
India should frame a national level action plan for long-term implementation of
freight-supportive policies. Strategic decisions including unbundling terminal
operations and corporatization of railways and ports will accelerate investment and
modernize freight facilities. This will also help prioritize projects and direct resources
efficiently.
to facilitate projects through coordination
among various stakeholders, rationalize tariff and govern business.
Smart Cities must focus on pro-active measures that emphasize on food, waste,
water, mobility, construction, air quality, manufacturing, and local climate regulation
to ensure low carbon footprint.
a. Power - Availability of cheap and reliable power is essential for industrial growth.
Establish eco-grants/channelize CSR funds to local businesses to help reduce
their carbon footprint.
b. Recycle and Reduce waste to zero – Encourage changes in behavior
The project showcases innovative solution engaging local community for
sustainable solid waste management was designed and implemented by
Janwani-MCCIA. Katraj Gaon is the largest ward in Pune with 12,000
establishments composed of a high and low income residential and commercial
units, industries, factories, shops, slums as well as rural areas.
3. Funding
4. The Special Investment Region (SIR) Act, 2009 should be enacted on a national level
5. National Freight Strategic Plan
6. Set up an independent regulatory authority
3.2 Medium Term
1. Thrust on self-sufficient cities
Zero Garbage Initiative, Katraj, Pune, Maharashtra
03 Issues and Recommendations
DFCs are envisioned to create sophisticated infrastructure to trigger economic
development, inject foreign investment and attain sustainable development.
However, infrastructure development along DFCs is hampered by delayed
clearances, cost overruns, land acquisition and financing problems. Hence,
timely delivery of the projects is essential to realize the full potential of the
DFC strategic plan.
Land acquisition remains the biggest hurdle, impeding the pace of
development and industrialization.
a. Rail linked ICDs - Private participation in creating freight terminal
infrastructure along the DFCs is critical to ensure last-mile linkage.
The new Land Acquisition Act will increase costs and time required
to setup ICDs.
b. Suitable amendments to the acquisition policy and focused
interventions such as landowner cooperatives can minimize
resistance from the affected families and help expedite infra
projects.
Complicated procedures and uncertainties deter investment and delay
execution. Stable macro-economic regime and simplification of
regulatory and taxation process (including GST)are important to meet
the projects' needs.
3.1 Short Term
1. Land acquisition
2. Policy Regime
22 | Dedicated Freight Corridors - Challenges & Opportunities Dedicated Freight Corridors - Challenges & Opportunities | 23
DFCs are capital intensive and have very long gestation periods due to which they
appear financially unviable at commercial funding rates. This makes them overly
dependent on funding from the Government and multi-lateral agencies. There is need
to draw more financial commitment from States and private sector (both domestic
and foreign, especially pension funds) to sustain financing in long-term.
India should frame a national level action plan for long-term implementation of
freight-supportive policies. Strategic decisions including unbundling terminal
operations and corporatization of railways and ports will accelerate investment and
modernize freight facilities. This will also help prioritize projects and direct resources
efficiently.
to facilitate projects through coordination
among various stakeholders, rationalize tariff and govern business.
Smart Cities must focus on pro-active measures that emphasize on food, waste,
water, mobility, construction, air quality, manufacturing, and local climate regulation
to ensure low carbon footprint.
a. Power - Availability of cheap and reliable power is essential for industrial growth.
Establish eco-grants/channelize CSR funds to local businesses to help reduce
their carbon footprint.
b. Recycle and Reduce waste to zero – Encourage changes in behavior
The project showcases innovative solution engaging local community for
sustainable solid waste management was designed and implemented by
Janwani-MCCIA. Katraj Gaon is the largest ward in Pune with 12,000
establishments composed of a high and low income residential and commercial
units, industries, factories, shops, slums as well as rural areas.
3. Funding
4. The Special Investment Region (SIR) Act, 2009 should be enacted on a national level
5. National Freight Strategic Plan
6. Set up an independent regulatory authority
3.2 Medium Term
1. Thrust on self-sufficient cities
Zero Garbage Initiative, Katraj, Pune, Maharashtra
03 Issues and Recommendations
3SEZ data (http://www.sezindia.nic.in/writereaddata/pdf/ListofFormalapprovals.pdf)
Dedicated Freight Corridors - Challenges & Opportunities | 2524 | Dedicated Freight Corridors - Challenges & Opportunities
Stakeholders: Janwani-MCCIA, Pune Municipal Corporation, local residents,
SWaCH waste pickers cooperative, Maharashtra Plastic Manufacturers Association
(MPMA) and corporate sponsors.
Process:
• Waste generators (households/businesses) segregate their waste in wet (organic)
and dry (inorganic) waste bins or bags
• Waste-pickers collect segregated waste from the generators and further
segregate dry waste and sell material to scrap buyers. Non-saleable items and
wet waste are delivered to the feeder point
• Wet waste is disposed of through composting, biogas and other technologies
• Any remaining waste is sent for processing to the plant/landfill
c. Ensure access to cultural and social amenities to all to ensure inclusive development
d. Collaborate with and support other stakeholders e.g. local communities and NGOs
to build lasting relationships and empower communities while tackling relevant
sustainability concerns
e. Regional Water Management – ensure adoption of efficient water management
practices within the city and provide incentive instead of subsidy for high
performance irrigation, thereby making water consumption more responsive
towards current and future needs.
Planned development of strategic importance land is essential to ensure economic
development. Moreover, redevelopment comes at a high price, making it crucial to
protect freight routes from encroachment.
International benchmarking and analysis of tariff, cost structure, and management and
operations can bridge productivity gap in the sector.
2. Early protection of freight routes from encroachment
3. International benchmarking
4. Ease out approval process to encourage investment
3.3 Long Term
Business Plan
3 Only 185 out of 566 formally approved SEZs are operational. DFCs are ambitious
projects, hinging on private sector investment to bring out the desired industrial and
socio-economic development. Stakeholder consultation is essential to resolve
fundamental constraints affecting the manufacturing sector in India. Establish
institutional mechanisms for business incubation, venture capital, to draw private
investment.
a. Generating synergiesImprove inter-modal coordination between
railways, ports, road transport and aviation
to build seamless transportation network
b. Service to customersOne stop shop and flexible structure to
improve interoperability
c. Product innovationProvide expert advice on logistics and
exports for path allocation and pricing
d. Quick access to data Customer information and GPS tracking on
time of shipment across different modes
e. Diversify operations
Adopt structural reforms in transportation sector to increase private sector
penetration in the provision of services:
DFCs are comprehensive projects aiming at infrastructure and urban development. Strategic
development of transport infrastructure will spur growth of freight-intensive industries,
generating both direct and indirect employment, and fuel economic development. Fostering
private participation and social equity in all spheres including freight and logistics and urban
and regional development is critical to unlock this opportunity and ensure inclusive
development.
Conclusion
3SEZ data (http://www.sezindia.nic.in/writereaddata/pdf/ListofFormalapprovals.pdf)
Dedicated Freight Corridors - Challenges & Opportunities | 2524 | Dedicated Freight Corridors - Challenges & Opportunities
Stakeholders: Janwani-MCCIA, Pune Municipal Corporation, local residents,
SWaCH waste pickers cooperative, Maharashtra Plastic Manufacturers Association
(MPMA) and corporate sponsors.
Process:
• Waste generators (households/businesses) segregate their waste in wet (organic)
and dry (inorganic) waste bins or bags
• Waste-pickers collect segregated waste from the generators and further
segregate dry waste and sell material to scrap buyers. Non-saleable items and
wet waste are delivered to the feeder point
• Wet waste is disposed of through composting, biogas and other technologies
• Any remaining waste is sent for processing to the plant/landfill
c. Ensure access to cultural and social amenities to all to ensure inclusive development
d. Collaborate with and support other stakeholders e.g. local communities and NGOs
to build lasting relationships and empower communities while tackling relevant
sustainability concerns
e. Regional Water Management – ensure adoption of efficient water management
practices within the city and provide incentive instead of subsidy for high
performance irrigation, thereby making water consumption more responsive
towards current and future needs.
Planned development of strategic importance land is essential to ensure economic
development. Moreover, redevelopment comes at a high price, making it crucial to
protect freight routes from encroachment.
International benchmarking and analysis of tariff, cost structure, and management and
operations can bridge productivity gap in the sector.
2. Early protection of freight routes from encroachment
3. International benchmarking
4. Ease out approval process to encourage investment
3.3 Long Term
Business Plan
3 Only 185 out of 566 formally approved SEZs are operational. DFCs are ambitious
projects, hinging on private sector investment to bring out the desired industrial and
socio-economic development. Stakeholder consultation is essential to resolve
fundamental constraints affecting the manufacturing sector in India. Establish
institutional mechanisms for business incubation, venture capital, to draw private
investment.
a. Generating synergiesImprove inter-modal coordination between
railways, ports, road transport and aviation
to build seamless transportation network
b. Service to customersOne stop shop and flexible structure to
improve interoperability
c. Product innovationProvide expert advice on logistics and
exports for path allocation and pricing
d. Quick access to data Customer information and GPS tracking on
time of shipment across different modes
e. Diversify operations
Adopt structural reforms in transportation sector to increase private sector
penetration in the provision of services:
DFCs are comprehensive projects aiming at infrastructure and urban development. Strategic
development of transport infrastructure will spur growth of freight-intensive industries,
generating both direct and indirect employment, and fuel economic development. Fostering
private participation and social equity in all spheres including freight and logistics and urban
and regional development is critical to unlock this opportunity and ensure inclusive
development.
Conclusion
YES BANK, India's fourth largest private sector Bank, is the outcome of the professional &
entrepreneurial commitment of its Founder, Rana Kapoor and his top management team, to
establish a high quality, customer centric, service driven, private Indian Bank catering to the
future businesses of India. YES BANK has adopted international best practices, the highest
standards of service quality and operational excellence, and offers comprehensive banking
and financial solutions to all its valued customers.
YES BANK has a knowledge driven approach to banking, and a superior customer experience
for its retail, corporate and emerging corporate banking clients. YES BANK is steadily
evolving as the Professionals' Bank of India with the vision of “Building the Best Quality Bank
of the World in India” by 2020.
ASSOCHAM, acknowledged as the Knowledge Chamber of India, has emerged as a forceful, pro-
active, effective and forward looking institution playing its role as a catalyst between the
Government and Industry. Established in 1920, the Chamber has been successful in influencing
the Government in shaping India's economic, trade, fiscal and social policies which will be of
benefit to trade and industry. ASSOCHAM renders its services to over 4,00,000 members which
include multinational companies, India's top corporates, medium and small scale units and
associations representing the interest of more than 400 Chambers and Trade Associations from
all over India encompassing all sectors.
ASSOCHAM has over 100 National Committees covering the entire gamut of economic activities
in India. It has been acknowledged as a significant voice of the Indian industry especially in the
fields of Corporate Social Responsibility, Environment & Safety, Corporate Governance,
Information Technology, Agriculture, Nanotechnology, Biotechnology, Pharmaceuticals, Telecom,
Banking & Finance, Company Law, Corporate Finance, Economic and International Affairs,
Tourism, Civil Aviation, Infrastructure, Energy Power, Education, Legal Reforms, Real Estate,
Rural Development etc. The Chamber has its international offices in China, Sharjah, Moscow, UK
and USA. ASSOCHAM has also signed MoUs to set up partnerships with Business Chambers in
more than 75 countries.
YES BANK, India's fourth largest private sector Bank, is the outcome of the professional &
entrepreneurial commitment of its Founder, Rana Kapoor and his top management team, to
establish a high quality, customer centric, service driven, private Indian Bank catering to the
future businesses of India. YES BANK has adopted international best practices, the highest
standards of service quality and operational excellence, and offers comprehensive banking
and financial solutions to all its valued customers.
YES BANK has a knowledge driven approach to banking, and a superior customer experience
for its retail, corporate and emerging corporate banking clients. YES BANK is steadily
evolving as the Professionals' Bank of India with the vision of “Building the Best Quality Bank
of the World in India” by 2020.
ASSOCHAM, acknowledged as the Knowledge Chamber of India, has emerged as a forceful, pro-
active, effective and forward looking institution playing its role as a catalyst between the
Government and Industry. Established in 1920, the Chamber has been successful in influencing
the Government in shaping India's economic, trade, fiscal and social policies which will be of
benefit to trade and industry. ASSOCHAM renders its services to over 4,00,000 members which
include multinational companies, India's top corporates, medium and small scale units and
associations representing the interest of more than 400 Chambers and Trade Associations from
all over India encompassing all sectors.
ASSOCHAM has over 100 National Committees covering the entire gamut of economic activities
in India. It has been acknowledged as a significant voice of the Indian industry especially in the
fields of Corporate Social Responsibility, Environment & Safety, Corporate Governance,
Information Technology, Agriculture, Nanotechnology, Biotechnology, Pharmaceuticals, Telecom,
Banking & Finance, Company Law, Corporate Finance, Economic and International Affairs,
Tourism, Civil Aviation, Infrastructure, Energy Power, Education, Legal Reforms, Real Estate,
Rural Development etc. The Chamber has its international offices in China, Sharjah, Moscow, UK
and USA. ASSOCHAM has also signed MoUs to set up partnerships with Business Chambers in
more than 75 countries.
NOTES NOTES
NOTES NOTES
NOTES
NOTES
