World Bank loans $245 million to Indian Railways

NEW DELHI: The World Bank announced in a statement on Wednesday, that it has approved a USD 245 million loan to boost India’s efforts to improve its rail freight and logistics infrastructure. The Rail Logistics project will assist India in diverting more traffic from roads to rail, improving the efficiency of both freight and passenger transportation, while lowering annual greenhouse gas emissions by millions of tonnes. Additionally, the project will encourage more private sector investment in the railroad industry.

In the fiscal year that ends in March 2020, Indian Railways, the fourth-largest rail network in the world, transported 1.2 billion tonnes of freight. However, just 17 per cent of the freight in India is moved by rail, while 71 per cent is moved by road. The statement added that Indian Railways’ capacity limitations have restricted shipping volumes and slowed down their speed and dependability. Consequently, the market share of railways has been going down over time; in 2017–18, it had a market share of 32 per cent compared to 52 per cent a decade ago.

Road freight accounts for about 95 per cent of the freight sector’s emissions, making it the biggest source of GHG emissions. Additionally, trucks were involved in 15.8 per cent of all fatal road transport-related accidents and 12.3 per cent of all road fatalities in 2018. With Indian Railways aiming to become a net-zero carbon emitter by 2030, rail has the potential to reduce 7.5 million tonnes of carbon dioxide and other greenhouse gases annually. Rail accounts for around one-fifth of the GHG emissions from vehicles. The Board of Executive Directors of the World Bank sanctioned the loan from the International Bank for Reconstruction and Development (IBRD), which has a 22-year maturity with a seven-year grace period. The World Bank also provides funding for the new Eastern Dedicated Freight Corridor-3 (EFDC). According to the statement, the project’s main focus will be on leveraging commercial funding through enlisting the private sector and creating customer-oriented approaches.