New Delhi, July 10 : Asian Development Bank (ADB) and the Government of India have signed a 150 million USD loan for first tranche of railway sector investment program aimed at improving rail freight services and passenger transport routes. |
The signatories to the loan were Venu Rajamony, Joint Secretary (Multilateral Institutions), Department of Economic Affairs, Ministry of Finance, on behalf of the Government of India; and Hun Kim, Country Director for India, on behalf of ADB. The project agreement was signed by Satish Agnihotri, Managing Director, Rail Vikas Nigam Limited.
The program will help India improve rail services along some of its busiest freight and passenger transport routes, providing double-track for about 840 kilometers of rail routes and electrifying about 640 kilometers.
New signaling will also be installed. ADB will also support accounting reforms to improve operational and financial efficiency at Indian Railways.
The program will reduce fuel consumption and enhance energy efficiency, reduce pollution, enhance railway safety, increase the line capacity, benefiting consumers and producers of goods and services, improve staff productivity, and incorporate innovating financing modalities by pursuing carbon credits under UNFCCC.
The total cost of the railway sector investment program is 1,144.6 million USD, out of which loan assistance from ADB is 500 million USD (in four tranches) and GOI's funding is 644.6 million USD. This is the 1st tranche for a total US$ 343.4 million (ADB loan 150 million USD + GOI share 193.4 million USD).
Speaking on the occasion, Rajamony said that although railways make up a significant part of India's transport sector, constraints on high density railway routes present a chronic challenge.
This program should improve energy efficiency, safety, reliability, affordability, and environmental sustainability along key railway routes with heavy traffic, he said.