Railways revamps private freight terminal policy

After the tepid response to its private freight terminal (PFT) policy, the railways have revamped it. They’ve simplified the revenue sharing clause by delinking it from the wholesale price index.

The PFT owner is to pay the railway zone concerned half the prevailing per-tonne terminal charge leviable at their goods shed or Rs 20, whichever is higher. At present, the terminal handling charge for freight cargo in a railway goods shed is Rs 40 a tonne. The railways get a share in the revenue since the private terminals get connectivity to their network. The railways would not regulate what the PFT owner can charge a customer for handling the cargo.

 

Under the new policy, new PFTs will be sharing revenue after five years and existing ones after two years of the notification. “For the railways, this is an evolution phase in PPP (private-public partnership) experience and the flaws in policies come into highlights only when it is tested on ground. We are still open to address the genuine concerns of our customers,” said a railway official.

The new policy has fixed a uniform fee of Rs 2 crore for both new and old PFTs. The eligibility criteria for applicants has also been expanded. Earlier, only an entity registered under the Companies Act, 1956, could have applied. This barred many legitimate entitites, such as Central Warehousing Corporation, from setting up a PFT. Now, even a joint venture company or a cooperative society can apply.

The documents required have been restricted to papers relating to eligibility and projection of anticipated business volumes for existing PFTs.

An executive of a private company said, “No doubt, the railways have sorted out many ambiguities from the customer end and made it easier yo be understood at even the goods clerk level. As revenue sharing is now 50 per cent of the terminal handling charge per tonne, it won’t pinch us, provided the railways’ terminal charges are kept low.” Another concern is that the approval of the zonal railway for the PFT should be granted within a reasonable time.

The railways’ goods sheds are in shambles and cargo handling is getting congested. This is precisely why the railways are encouraging the formation of PFTs. Private sidings catering to own traffic will continue. Other private sidings handling railways’ traffic, apart from their own, will have to necessarily change into a PFT.

Government-owned CONCOR has planned to build its new facilities as a PFT. “We cannot convert the existing facilities on railway land into PFTs, as they are required to be on private land and our terminals are on railway-leased land. The facilities that we are planning will be built with PFTs,” said Anil Kumar Gupta, managing director.