WB’s USD 245-million loan for Railway Logistics Project

The World Bank (WB) has approved a USD 245 million loan to extend support for Railway Logistics Project.

Highlights

  • World Bank loan will support India’s efforts of modernising rail freight and logistics infrastructure.
  • As per statement, capacity constraints of Indian Railways have reduced the speed & reliability of shipments as well as limited the volumes.
  • Thus, Railways has been losing market share to trucks by time. In 2017-18 the market share was 32 per cent, as compared to 52 per cent a decade earlier.

Rail Logistics project

Rail Logistics Project will help India in shifting more traffic from road to rail. Thus, it will make freight and passenger transport more efficient. It will also reduce millions of tonnes of greenhouse gas emissions (GHG) every year. It will incentivise private sector investment in railway sector.  The new project will also benefit millions of rail passengers in country as railway lines get decongested when freight moves to dedicated lines. The project will also focus on harnessing commercial financing by developing customer-oriented approaches and engaging private sector. It will support institutional capacity strengthening of Dedicated Freight Corridor Corporation of India Limited (DFCCIL).

Freight transport through railways

Indian Railways is the fourth-largest rail network worldwide. It has transported 1.2 billion tonnes of freight in fiscal year 2019-2020. However, 71 percent of India’s freight is transported through road, while 17 percent is transported by rail.

GHG emission by Road and Rail Freights

Road freight is the largest contributor to Green House Gas (GHG) emissions. It accounts for 95 per cent of emissions in freight sector. As per report, in 2018, trucks accounted for 12.3 per cent of road accidents while 15.8 per cent of total road transport-related deaths. On the other hand, Rail emits around one-fifth of trucks’ GHG emissions. Furthermore, Indian Railways has planned to become a net-zero carbon emitter by 2030. Railways has the potential to reduce 7.5 million tonnes of greenhouse gases and carbon dioxide each year.

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