NEW DELHI, Aug 16: India plans to start work on a dedicated rail freight corridor between New Delhi and Mumbai in the fiscal year 2008-09 and complete it by 2012, a federal minister said on Thursday.

A meeting of the cabinet had earlier approved the development of an industrial corridor between the two cities, which will include the rail project and be built with Japanese assistance.

Japanese newspaper Sankei Shimbun reported this week that Tokyo was set to offer around 400 billion yen ($3.44bn) in low-interest loans as official development aid to help fund the construction of the high-speed freight line.

Japanese Prime Minister Shinzo Abe is due to visit India between Aug. 21-23.

“The construction activity for dedicated freight corridor will start in 2008-09 and completed by 2012,” cabinet spokesman and senior minister Priyaranjan Dasmunsi told reporters.

Indian Trade Minister Kamal Nath said in July that the entire corridor would cost $90 billion.

Apart from the rail link, there are plans to build new power capacity of 4,000 MW, three new sea ports and six airports.

—Reuters