Eight companies, including Tata Steel, Central Warehousing Corporation and Container Corporation of India, have sought Indian Railways? permission to set up freight terminals to transport third-party cargo after the latter relaxed eligibility criteria effective June 21.
The railways had issued a policy in June 2010 allowing companies to construct private freight terminals (PFTs). However, the policy failed in eliciting a response from the corporate sector, which complained that the special purpose vehicles could not meet the net worth criterion. The railways wanted the implementing company to have a net worth of at least R10 crore in the previous year.
Last month, the national transporter revised the policy and allowed subsidiaries and joint ventures of companies to set up the terminals even if they have a lower net worth. For eligibility, the railways would consider the net worth of holding company or the lead partner of the joint venture. Besides, it has asked the operators of private sidings ?freight terminals used for captive use ? to convert the sidings into PFT if they want to service third parties.
?We have received 15 proposals after revising the policy,? a senior official in the railway ministry told FE. Of the 15 proposals, 11 are to convert private sidings into PFTs, the official said. Another official in the ministry said that the railways has already approved the proposals of Central Warehousing Corporation (CWC) and Lloyd Steel to convert their private sidings into PFTs.
CWC MD B B Patnaik said, ?We?ve big warehouses at Bamanhari in UP and Nabha in Punjab. We want to use them to service other companies also to utilise the revenue generation capacity.? However, he refused to give any financial details. Container Corporation of India?s director (finance) P Alli Rani said, ?It?s a major departure from the railways? policy of operating freight terminals on its own. Companies can earn a lot from it.?