NEW DELHI: India has signed a second loan agreement with the World Bank to continue building a freight-only rail line linking Ludhiana in the north and Kolkata in the eastern area of the country.

The World Bank loans totaling US$2.075 billion are for India's Eastern Dedicated Freight Corridor (EDFC) - designed to improve the movement of raw materials and finished goods between both sides of the sub-continent while alleviating pressure on existing passenger rail networks.

The EDFC is part of India's plan to build two high-capacity, higher-speed dedicated freight corridors along the country's 'Golden Quadrilateral' that currently connects Delhi, Mumbai, Chennai and Kolkata and carries more than 60 percent of India's total rail freight.

The plan is a counterbalance to the rapid growth of road transport since the 1990s that now accounts for 65 percent of the country's freight market. Construction of a 343 km section from Khurja to Kanpur is already under way following a contract award by the Dedicated Freight Corridor Corporation (DFCCIL) to Tata-Aldesa, a joint venture between Tata Projects India and Aldesa of Spain.

"Implementing the Dedicated Freight Corridor program will provide India the opportunity to create one of the world's largest freight operations, adopting proven international technologies and approaches which can progressively be extended to other important freight routes throughout the network," said Onno Ruhl, the World Bank country director in India.

"The project will play a transformational role by reducing greenhouse gas emissions as a result of promoting transfer of freight from road to rail. It will also serve as a catalyst for accelerating economic development in the relatively poor state of Uttar Pradesh through which the line passes. We hope this will lead to communities along the corridor having better access to employment opportunities, health, education and other social services," he added.

In addition to establishing seven integrated manufacturing clusters using the EDFC as a backbone, DFCCIL says the Eastern corridor is estimated to produce a total of 10.48 million tons of greenhouse gas emissions to 2042 – compared to 23.29 million GHG if the expected seven percent per annum increase in the country's total freight traffic is all consigned by truck.

"DFCCIL will be the game changer in the Indian transport sector by providing a cheaper, quicker and safer mode of freight," said Adesh Sharma, DFCCIL managing director. "We are determined to adhere to the scheduled completion target of [the] Eastern Corridor by December 2019," he added.