Indian Railways plans to share revenue with private freight terminals

Posted by Daily Shipping Times on 02-01-2019        Tweet

NEW DELHI: Giving a major boost to the existing and upcoming private sector freight operators, the Indian Railways has decided to share with them the revenue generated from handling traffic.

The national transporter has introduced a terminal charge of Rs 20 per tonne for both inward and outward traffic from these terminals.

At present, the Railways has around 58 private freight terminals handling 15 million tonnes (MT) of traffic.

“Based on the current plan, terminal charges levied for both inward and outward traffic at PFTs will be reimbursed (for the terminal management committee) on a monthly basis by the zonal railways concerned,” said a railway official.

For the first eight months of the financial year, April to November, the national transporter has posted a 6 per cent increase in freight traffic to 790.42 MT. This is against 746.29 MT during April to November of 2017-18. It++ also increased the revenue from freight traffic by 5.4 per cent from Rs 711.68 billion during the April-November period of 2017-18 to Rs 750.38 billion during the same time in 2018-19.

In 2017-18, the railways handled 1,160 MT, as compared to 1,109 MT in 2016-17.

To increase private participation in freight sector, the railways is working on a proposal to allow private freight terminals on railway land near stations. The move is to give a push to public-private participation in the freight sector. Currently, PFTs are built by operators on private land outside railway areas, for which the railways provides connectivity.

The railways’ revenue will increase through using vacant land, and the Railway Land Development Authority is reportedly working on this.

The Central Government had announced in 2016-17 coming up with 100 freight terminals with private participation. During the same financial year, it added more than 40 private freight terminals.

This included investments of Rs 20 billion by major companies such as Hindustan Petroleum Corporation (HPCL), Adani Agri Logistics, NTPC, Indian Oil Corporation (IOC), UltraTech Cement and Reliance Cement Company, adjacent to their plants.

Later in 2017, the railways also came up with a proposal to have 60 freight terminals in PPP mode with an investment of around Rs 50 billion, handling over 55 MT of freight.

The concept of PFTs was floated in 2009 by then Railways Minister Mamata Banerjee in her budget.

In December, the railways decided to provide a 25 per cent discount on transporting empty containers as well empty flat container wagons.

Giving discounts in hauling empty containers and flat wagons is expected to increase more loading in both the export-import and domestic segments of container traffic. The move will boost the finances of 18 private container train operators (CTO) and state-run Container Corporation (Concor), which are operating in the segment.

The railways handles around 47.35 million tonnes of container traffic annually, bringing in a revenue of Rs 47.16 billion.