Thursday, September 17, 2009

Indian Rail Freight Plan to be Financed by Japan

Long term loan for ambitious scheme
Shipping News Feature

INDIA - The Indian government has announced that it plans to take a 177 billion rupees ($3.68 billion) loan from Japan to finance the construction of the first phase of its proposed rail freight corridor which will connect the north and western parts of the country.

At a meeting with reporters Ambika Soni, the Minister for Information and Broadcasting, revealed that the loan shall be made under the auspices of Japans Overseas Development Assistance (ODA) plan and shall be repayable over the next 30-40 years at an interest rate of 0.2% per annum.

According to the terms of the agreement Japanese companies will be the primary contractors on the new project, with at least 30% of the loan to be spent on Japanese products or services.

The proposed development will be a major upgrade to India’s rail network in order to meet the growing requirement for the movement of freight traffic. It is envisaged to ultimately run from Dadri near New Dehli to Mumbai's Jawaharlal Nehru port, a total of over 1,400 kms.