The railways ministry has come out with the policy framework to allow private firms to use the railways network for commodity transport and develop freight terminals, a PPP mode in the rail transport sector.
The policy papers for both Special Freight Train Operator Scheme (SFTO) and Private Freight Terminal (PFT) were released here on Friday by Railway Board chairman Vivek Sahai. FE had reported the railways? move on June 3. The policy will help the railways to increase the rail share in non-conventional traffic and also enable rapid development of network of freight terminal with private investment. ?We expect lot of volumes for the railways through these schemes,? Sahai said while releasing the policy document.
The new policy permits private operators to transport goods for end-users for a fee. On developing freight terminals, the revenue model involves fee-sharing between the railways and the private operator. For operating freight trains, the private firm will be offered a wagon-specific rebate so as to make the business remunerative.
The minimum registration fee that an operator will have to shell out upfront would be Rs 5 crore (for molasses, edible oil, caustic soda), Rs 20 crore for special steel products requiring Special Purpose Wagons and Rs 15 crore for bulk fertiliser, bulk cement and fly ash.
A freight train operator can carry fertilisers, cement, chemicals, edible oil and petrochemicals excluding cooking gas, auto fuel and kerosene. For loading each rake ? which should not be smaller than what the Indian Railways use ? a freight rebate of 12% will be granted to the operator for 20 years or until the investment is recovered. In the case of high-capacity wagons, a higher rebate of 2% will be given for each additional tonnage of 10%.
Revenue-sharing on freight terminals will start after five years of the commissioning of the terminal (two years in case of brownfield project).