The World Bank will provide a loan of nearly $ 4 billion for the proposed Dedicated Freight Corridor project, according to Exim News Service.

In order to negotiate the terms of the loan with the Union government, a team of officials, led by lead transport specialist Mr Ben L. J. Eijbergen, will visit New Delhi this week. The team will also hold meetings with senior officials from the Finance and Railway Ministries.

The loan amount is proposed to be used for the eastern freight corridor between Punjab and West Bengal.

Earlier, the Asian Development Bank (ADB) and the World Bank together were to invest in the project, but ADB later changed its mind against giving any new loan for railway projects. The Dedicated Freight Corridor Corporation Ltd (DFCC), the special purpose vehicle set up to supervise the corridor's construction, had estimated that ADB would agree for a loan of $ 1.5 billion.

However, according to recent reports, a senior government official has disclosed that the World Bank has given its nod to fund the entire requirement for the eastern corridor. "But the terms are yet to be negotiated," the official clarified.

The corridor is estimated to cost Rs 40,665 crore, of which two-third will come from borrowings from multilateral institutions and banks and the balance will be in the form of equity from Railways. The burden on the financially-constrained Railways is expected to be reduced to a large extent due to the pact with the World Bank.

Of the two dedicated corridors for freight movement, the western corridor will connect Jawaharlal Nehru Port in Maharashtra to Dadri in Uttar Pradesh and the eastern corridor will join Dankuni in West Bengal with Ludhiana in Punjab. Japan International Cooperation Agency will fund the western corridor.

Freight loading capacity on these stretches is expected to be boosted nearly three-fold as a result—from 92 million tonnes to 253 million tonnes by March 2017.