The World Bank’s Board of Directors today approved a $ 245 million loan to support India’s efforts to modernize rail transport infrastructure. The Rail Logistics project will help India move more vehicles from road to rail, make transport — both freight and passenger — more efficient and, in turn, reduce millions of tons of greenhouse gases (GHG) each year. The project will also encourage private sector investment in the railway sector.
Indian Railways (IR) is the fourth largest network in the world as it transports 1.2 billion tons in the financial year ending March 2020. However, 71 percent of Indian goods are shipped by road, and only 17 percent by train. IR power limits limit volumes and reduce transmission speed and reliability. As a result, IR has been losing market share to trucks over the years; in 2017-18, its market share was 32 percent, down from 52 percent a decade earlier.
Road transport is a major contributor to GHG pollution, accounting for about 95 percent of the revenue generated by the transport sector. Trucks also accounted for about 12.3 percent of road accidents and 15.8 percent of the total traffic-related deaths in 2018. The railway emits about one-fifth of GHG truck emissions, and the IR plans to become a net-zero carbon emitter by 2030, capable of eliminating 7.5 million tons of carbon dioxide and other greenhouse gases each year.
The Rail Logistics project will strengthen Indian multimodal transport terminals and terminals, by upgrading train and port links and inland gates, and building the first and last miles of rail connections.The new Eastern Dedicated Freight Corridor-3 (EFDC), also sponsored by the World Bank, is already facilitating the rapid and efficient distribution of finished goods and services between the northern and eastern parts of India. The Rail Transport Project will link several other infrastructure projects and bring about the efficiency of the private sector to increase train capacity, establish and manage intermediate vehicles, and improve quality and value-added services through private trains and terminals.
The main focus of this work will be on utilizing financial support in consultation with the private sector and developing customer-focused approaches. The project will also support the strengthening of the institutional capacity of Dedicated Freight Corridor Corporation of India Limited (DFCCIL) as a commercial organization and equip it to provide more transport services.
“India is very much focused on transport in many forms, especially railways as the mainstay of efficient transport in the freight sector,” said SarojAyush and Martha B. Lawrence, World Bank Team Leaders in the project. “This project will help increase the efficiency of the private sector in integrating rail transport into supply chain stations.”
The project places special emphasis on combating gender-based violence and will support regular public awareness campaigns on the issue. It will also carry out activities to systematically improve women’s access and transformation in the railways, including improving women’s access to technology services; building safer workplaces for contract workers and illegal women workers; and prioritizing child care for illegal women workers on construction sites.The $ 245 million loan from the International Bank for Reconstruction and Development (IBRD) has a growth of 22 years, including a grace period of 7 years.
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