Indian Railways Finalises Policy on Private Freight Terminal

Indian Railways Finalises Policy on Private Freight Terminal

The Ministry of Railways has finalized policy on Private Freight Terminal (PFT) with the participation of the private sector. The main objectives of this policy are to enable rapid development of net work for freight terminals with private investment to integrate rail transport with supply chain to provide efficient and cost effective logistic to end users and a new business opportunity to the investor who gets rail access to handle third party cargo. This policy has become effective from 31st May, 2010.

The decision to formulate such a policy was announced by the Railway Minister, Mamata Banerjee in her Railway Budget presented last year. Mamata Banerjee also held pre-budget discussions with the representatives of chamber of commerce and industry followed by a post budget workshop between Railway Board and private sector representatives to obtain their feedback on a number of such policy initiatives involving private sector participation.

The salient features of PFT are; 1) Terminals (green or brown field) to come up only on private land. 2) Depending on the traffic proposed, appropriate rail infrastructure and equipment to be provided to conform to EOL function. 3) Can handle all traffic except outward coal, coke and iron ore. 4) Application fee of Rs. 1 crore and security deposit of Rs. 1 crore to ensure timely commissioning of PFT. 5) Can provide value added logistics related services and charge for the same. 6) In principle Approval within 100 days. 7) Period of agreement for 20 years extendable by one period of 10 years. Further extension permitted on the basis of extant policy at the time of such extension. 8) Revenue sharing to 50 per cent of terminal charge or Rs. 10 per ton whichever is higher with a moratorium of 2 years for Brown Field and 5 years for Green Field PFTs.

Investors in this scheme will be benefited in many ways like, a new business opportunity to augment presence in logistics chain, rail access to third party cargo, can provide value added services and charge for the same, long term contract with railways, and underutilized/unutilized existing sidings get opportunity for commercial utilization for their facility.

The policy document also include the eligibility criteria and other relevant details which can bee seen at Ministry of Railways’ website www.indianrailways.gov.in