The investor interest in the Indian Railways is seeing a gradual increase, at least in freight infrastructure projects. Around 22 greenfield private freight terminals would be coming up in the next few years.
This means the private sector would invest somewhere between R3,500 crore and R4,000 crore in the private freight terminal plan of the railways, which would help ease the pressure on the already overburdened freight terminals. The cost of building a greenfield terminal is around Rs 150-200 crore. The cash-strapped railways, which has an unhealthy operating ratio of 88%, has no funds to set up any new freight terminals. In over a year or so, around 18 logistic firms, including Concor, Pristine logistics and several other big players, have come up with the proposals for freight terminals.
?The PFT policy of the railways allows terminal operators to handle all cargo, except outward coal, coke and iron ore.? The railway policy is a lucrative business opportunity for logistic companies,? a railway official said. According to the policy, a private freight terminal can only come up on private land and not on railways’ land.? The railways in June 2010 allowed firms to construct PFTs. However, the policy failed to evoke a response from the corporate sector due to some unfeasible revenue-sharing clauses. The policy was then revamped based on the suggestions of private players.
As per the revenue-sharing model, the private player has to share 50% of the cargo-handling revenue with railways for five years. The concessionaire agreement is for 20 years, which is further extendable for 10 more years. Along with green field terminals, several firms have also come forward to build brownfield ?freight ?terminals, converting existing railways sidings into freight terminals. “There are around 23 proposals from companies such as Lloyd Steel, Tata Iron & Steel, Kribhco and several others who want to be operators. They have all applied for the brownfield projects,” the official added. The railway ministry has received proposals for 23 brownfield terminals.
