New Delhi, May 19: The government has set a five-year deadline to complete the Delhi-Calcutta and Delhi-Mumbai dedicated railway freight corridors. The two projects entail an investment of Rs 22,000 crore and as much as 85 per cent of this expenditure is expected to be financed through a low-interest Japanese loan.

While the Delhi-Calcutta corridor is expected to cost Rs 10,000 crore, the Delhi-Mumbai link will require an investment of around Rs 12,000 crore.

Railway minister Laloo Prasad Yadav said the infrastructure committee headed by Prime Minister Manmohan Singh has given the go-ahead for the project. The cabinet’s mid-term review of the railways held today also came out strongly in favour of the project.

The Planning Commission and the railway ministry are scheduled to complete the pre-feasibility study for the project by July 31 so that all clearances for starting the work are obtained by February 2006.

Planning Commission chairman Montek Singh Ahluwalia said he would begin negotiations with the Japanese soon so that the loan comes through when work on the project is scheduled to start.

Railway board chairman R. K. Singh told The Telegraph that the Japanese loan could comprise as much as 85 per cent of the total investment required for the project.

According to current indications, it would carry a 0.4 per cent rate of interest payable over a 40-year period with a moratorium of 10 years.

The Prime Minister has already held preliminary discussions with his Japanese counterpart, Junichiro Koizumi, during the latter's visit to India. Ahluwalia will now take it forward.

However, the exact financing pattern has not been finalised yet and the government is keeping its options open on the extent of budgetary support, internal generation and market borrowing that it can resort to.