Japanese government has promised a loan worth Rs. 130 crore for the Phase 1 freight corridor project to the government owned Dedicated Freight Corridor Corp of India (DFCCIL). The loan would help in building the western arm of the corridor.

DFCCIL is a Special Purpose Vehicle (SPV) formed under the administrative control of Railway Ministry for planning & development, mobilization of financial resources and construction, maintenance and operation of the Dedicated Freight Corridors. It was incorporated in October 2006 under Indian Companies Act 1956.

Phase I of the freight corridor project, a part of the 1,484 km Western Corridor connects Jawaharlal Nehru Port in Mumbai and Tughlakabad in Delhi. It is a 920 km stretch.

The Indian government seeks funds worth Rs 17,700 crore from Japanese Overseas Development Assistance at an interest rate of 0.2%. The Rs 130 crore engineering service loan is a part of the funding.

A DFCCIL official said, "Engineering service means preparing the project for contracting. This entails carrying out socio-economic impact, setting up of design parameters, preparing the bidding documents."

The western corridor is half of a marquee infrastructure project first started in 2005 by the first UPA government. It consists of two lines being constructed by the railways, one to transport goods, it will connect India's largest port in Mumbai to New Delhi through the western corridor (1,483km) and the other to connect Dankuni in West Bengal with Ludhiana in Punjab through the eastern freight corridor (1,806km).