In a bid to boost privatisation in freight movement, the railways is all set to relaunch its special freight train operator (SFTO) scheme that allows operators to run private freight trains to transport special commodities.

The renewed scheme would be more investor-friendly than the previous version launched in 2010. The scheme then failed to draw any interest from the industry.

The new SFTO allows private train operators loading off commodities such black oil, which was previously barred. The rebate period, which was earlier for 8 to10 years, has been increased to 20 years and the registration fees has also been reduced to sweeten the deal for the private players.

?The SFTO scheme has been reworked according to the industry demands to give a push to the private investment in freight movement. The period of rebate that was earlier 12% for eight to ten years has now been increased to 20 years and the registration cost has also been reduced,? a railway board official told FE. Under the scheme, the operator privately owns the freight train for transportation of identified commodities using railway infrastructure.

This policy provides an opportunity to logistics service providers and manufacturers to invest in wagons and uses advantages of rail transport to tie up with end users and market in train services owned by them for transportation of selected commodity. When launched in 2010, the SFTO scheme did evoke optimism in the market, but no private player came forward to run a special freight train.

The scheme has been relaunched to increase rail share in the commodities like molasses, edible oil, caustic soda, chemicals, petrochemicals, alumina, fly ash and consumer durables, where rail co-efficient is traditionally very low.

?Earlier, commodities that fell under black oil were not allowed to be transported. Not barring furnace oil, we have allowed eight commodities that fall under black oil category,? the official added.

According to railway board officials, the scheme will increase commodity base of rail traffic and will facilitate induction of better design of wagons, leading to an increase in throughput per train.