With policies for operation of the private freight terminals (PFT) and special freight trains (SFTO) put in place, the railway ministry is looking at raising its share of overall freight transportation by at least 10 per cent over the next five years.
Railway Board Chairman Vivek Sahai said: “We have finalised the policies for the operation of freight terminals and special freight trains by private players. The PFT scheme will enable rapid development of our network of freight terminals with the infusion of private investment. The SFTO scheme will make way for the induction of special purpose wagons (SPW) and increase rail share in non-conventional traffic. Together, the policies are expected to substantially boost freight traffic on the railways.”
A senior official at the ministry added there were around 900 brownfield terminals in the country owned by private players which were either unutilised or underutilised. The PFT scheme would enable commercial utilisation of such units and integrate rail transport with the supply chain to provide cost-effective logistics solutions to end users.
The PFT operators can provide value-added logistics services at their facilities. In return, they would have to shell out 50 per cent of terminal charges or Rs 10 per tonne of freight handled at the sidings to the railways. To make the proposition viable for operators, railways have further imposed a moratorium of two years on payments for brownfield units and five years for greenfield terminals.
Complementing the PFT scheme, railways have formulated the SFTO policy in line with which private players will be able to induct SPW to transport non-conventional traffic such as bulk cement, bulk fertilisers, fly ash, bulk alumina, steel products, vegetable oil and molasses. Operators will be given a rebate of 12 per cent on base freight for 20 years for recovery of cost by the railways.
Railways, at present, load 4-5 rakes of fly ash per day. Fly ash production in the country is projected to increase to around 100 MT by 2014. For bulk cement, production is expected to rise to 40 MT by 2014 from the present 12 MT. Over a third of bulk cement in the country is transported via roadways.
Non-bulk commodities have acquired importance with the growing share of the manufacturing sector in the national gross domestic product. The railways’ share in their carriage, however, has remained low at a mere 12 per cent of the total traffic. Sahai said: “The induction of SPW will result in an increase in the rail-coefficient of non-conventional commodities. We expect, on an average, 10-15 per cent increase in our market share of these commodities.”
The policies come in the wake of the railways increasingly losing market share to road operators in freight transportation. A study conducted by Rail India Transport and Economic Services (RITES) called ‘Total Transport System Study on Traffic Flows and Modal Costs’ shows, though traffic volumes on Indian Railways have gone up over the years, rail share, particularly in freight transport, has declined steadily over the past few decades.
Of the freight transportation market of around 2,600 million tonnes (2007-08 estimates), rail share amounted to a moderate 30 per cent. In 1950-51, railways had accounted for nearly 89 per cent of goods transported in the country. The biggest gainer in this period has been the road sector, which has increased its share from a mere 11 per cent in 1950-51 to 61 per cent in 2007-08.
