Press Releases - From Embassy

Press Releases - From Embassy
Press Release No.12

NEW DELHI: 26th July, 2010
Government of Japan extended Engineering Services Loan for
Dedicated Freight Corridor (DFC) (Phase 2)
The Exchange of Notes for Rs.88.5 crore loan was concluded today

The Government of Japan today agreed to extend to Government of India a soft loan assistance of 1,616 million yen (approximately equivalent to Rs.88.5 crore) for Dedicated Freight Corridor Project (Phase 2). The Exchange of Notes to formalize the arrangement to this effect was concluded on 26 July 2010 at a ceremony held in the Ministry of Finance in New Delhi. The notes were signed and exchanged between H.E. Mr. Hideaki Domichi, Ambassador of Japan to India and Mr. Prabodh Saxena, Joint Secretary, Ministry of Finance, Government of India on behalf of their respective Governments.

DFC project envisages a western corridor from Delhi to Mumbai, stretches over 1,400km, to cater for the increasing container transport requirements. Phase1 engineering services loan and main loan were already extended in October 2009 and March 2010 respectively. Today, Phase2 engineering services loan was extended for the consulting services of the sections between 1) Dadri (Uttar Pradesh) and Rewari (Haryana) and 2) Vadodara (Gujarat) and Mumbai (Maharashtra). The concessional loan will be made available through the Japan International Cooperation Agency (JICA), at the interest rate even as low as 0.01% per annum with the repayment period of 40 years including the grace period of 10 years.

By connecting Dadri and Mumbai with the section included in Phase2 DFC, the raw material production areas will be effectively linked to the consumption centers and to major ports, which will positively impact overall growth rates and efficiency in the Indian economy.

The Government of Japan hopes that the loan assistance would contribute to further strengthening of the relationship between Japan and India.