Indian Railways Finalise Policy on Special Freight Train Operator Scheme(SFTO) to Private Investors
Indian Railways Finalise Policy on Special Freight Train Operator Scheme
The Ministry of Railways has finalized policy on Special Freight Train Operator Scheme (SFTO) to provide an opportunity to private investors to use advantages of rail transport to market train services to end users. The objective of this scheme is to increase rail share in non-conventional traffic requiring Special Purpose Wagons (SPW) like bulk cement, bulk fertilizers, fly ash, selected chemical/petrochemical, bulk alumina, steel products requiring SPW, vegetable oil, molasses and caustic soda. This scheme has become effective from 31st May, 2010.
The Railway Minister Mamata Banerjee in her Railway Budget speech this year has announced the early notification of a policy to permit private operators to invest in infrastructure, on the lines of container train operators, and run special freight train for commodities such as automobiles, vegetable oil, molasses, chemicals and petrochemicals and bulk traffic like fly ash and cement. Prior to presentation of Railway Budget 2010-11, the Minister also held pre-budget discussions with the representatives of chamber of commerce and industry followed by a post-budget workshop between Railway Board and industry representatives.
The salient features of PFT are;
1) Period of concession for 20 years, extendable till expiry of codal life of wagon;
2) Train operator will charge tariff from end user and will be the consignor and consignee;
3) Maintenance of wagons by Railways at its own cost except special components, cost of which will be defrayed by investor;
4) Rebate of 12 per cent on base freight for 20 years or recovery of cost whichever is earlier;
5) In case of High Capacity Wagons (HCW) having throughput beyond 10 per cent of existing throughput, additional rebate of 2 per cent for each increase of 10 per cent for the additional tonnage for 20 years or till recovery of cost whichever is earlier;
6) Minimum investment for 3 rakes.
Investors in this scheme will be benefited in many ways like: A new business opportunity; Flexible loading and unloading points based on market demand; Investor can also induct rake taken on lease; No additional empty haulage, if the distance traveled is equal or less than loaded haulage; Permitted to load any commodity in the empty direction with a freight rebate of 10% on public tariff subject to the freight after rebate not less than class 100; Investors can bring in new design wagon with increased throughput and get higher rebate; Induction of additional rake, permitted in the same category in which the operator has registered without paying additional charges; Level playing fields ion movement of trains on first come first serve principle vis-à-vis other private operators and ensuring the average speed of freight tains on Indian Railways for SFTs.
The policy document also include eligible criteria, registration fee and other relevant details which can be seen at Ministry of Railways’ website www.indianrailways.gov.in
The Ministry of Railways has finalized policy on Special Freight Train Operator Scheme (SFTO) to provide an opportunity to private investors to use advantages of rail transport to market train services to end users. The objective of this scheme is to increase rail share in non-conventional traffic requiring Special Purpose Wagons (SPW) like bulk cement, bulk fertilizers, fly ash, selected chemical/petrochemical, bulk alumina, steel products requiring SPW, vegetable oil, molasses and caustic soda. This scheme has become effective from 31st May, 2010.
The Railway Minister Mamata Banerjee in her Railway Budget speech this year has announced the early notification of a policy to permit private operators to invest in infrastructure, on the lines of container train operators, and run special freight train for commodities such as automobiles, vegetable oil, molasses, chemicals and petrochemicals and bulk traffic like fly ash and cement. Prior to presentation of Railway Budget 2010-11, the Minister also held pre-budget discussions with the representatives of chamber of commerce and industry followed by a post-budget workshop between Railway Board and industry representatives.
The salient features of PFT are;
1) Period of concession for 20 years, extendable till expiry of codal life of wagon;
2) Train operator will charge tariff from end user and will be the consignor and consignee;
3) Maintenance of wagons by Railways at its own cost except special components, cost of which will be defrayed by investor;
4) Rebate of 12 per cent on base freight for 20 years or recovery of cost whichever is earlier;
5) In case of High Capacity Wagons (HCW) having throughput beyond 10 per cent of existing throughput, additional rebate of 2 per cent for each increase of 10 per cent for the additional tonnage for 20 years or till recovery of cost whichever is earlier;
6) Minimum investment for 3 rakes.
Investors in this scheme will be benefited in many ways like: A new business opportunity; Flexible loading and unloading points based on market demand; Investor can also induct rake taken on lease; No additional empty haulage, if the distance traveled is equal or less than loaded haulage; Permitted to load any commodity in the empty direction with a freight rebate of 10% on public tariff subject to the freight after rebate not less than class 100; Investors can bring in new design wagon with increased throughput and get higher rebate; Induction of additional rake, permitted in the same category in which the operator has registered without paying additional charges; Level playing fields ion movement of trains on first come first serve principle vis-à-vis other private operators and ensuring the average speed of freight tains on Indian Railways for SFTs.
The policy document also include eligible criteria, registration fee and other relevant details which can be seen at Ministry of Railways’ website www.indianrailways.gov.in
Draft Policy on SFTO
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