The Union Government on March 16, 2018 signed a $120 million loan agreement with the Asian Development Bank (ADB) for completion of works for double-tracking and electrification of railway tracks along high-density corridors to improve operational efficiency of Indian railways.
The tranche 3 loan is part of the $500 million multi-tranche financing facility for Railway Sector Investment Program approved by the ADB Board in 2011. The loan amount will be used to complete the ongoing works commenced under earlier tranches.
Signatories of the agreement
Sameer Kumar Khare, Joint Secretary (Multilateral Institutions), Department of Economic Affairs, Ministry of Finance, signed the loan on behalf of the Union Government, while Kenichi Yokoyama, Country Director of ADB’s India Resident Mission, signed on behalf of ADB.
• The project mainly aims to enhance the efficiency of rail infrastructure through electrification, introduction of modern signalling system and doubling rail tracks on the major routes in the country.
• It will help develop an energy-efficient, safe and reliable railway system that will result in reduced travel time along project rail routes and improved operational and financial efficiency.
• The funding for tranche 3 loan is expected to contribute towards achieving the overall program outputs of double-tracking about 840 kms of rail routes and electrification of 640 kms of tracks along high density corridors.
• The program will also help in implementing new accounting systems and provide additional safety measures including collision avoidance equipment.
• The investment program would be targeting busy freight and passenger routes in the states of Chhattisgarh, Odisha, Maharashtra, Karnataka and Andhra Pradesh including the ‘Golden Quadrilateral’ corridor that connects metropolitan cities of Chennai, Kolkata, Mumbai and New Delhi.
• The doubling of rail sections will be implemented along the Daund-Titlagarh section, the Sambalpur-Titlagarh section, the Raipur-Titlagarh Section and the Hospet-Tinaighat section while electrification will be undertaken along the 641-kilometer Pune-Wadi Guntakal section.
India’s loan agreement with ADB has a 20-year term including a grace period of 5 years, an annual interest rate determined in accordance with ADB’s London interbank offered rate (LIBOR)-based lending facility and a commitment charge of 0.15% per year.