Railways’ Policy on Automobile hub formulated

In a significant policy initiative to facilitate bulk movement of traffic by rail in automobile sector and to increase Railways’ share in automobile transportation, the Ministry of Railways has formulated policy on development of automobile and ancillary hub. This policy has become effective from 16th June 2010. Under this policy, any registered company in India i.e. manufacture of automobile or logistics company or Society for Indian Automobile Manufacturer (SIAM) or registered freight train operator having annual turnover of Rs. 20 crore during last financial year, can apply. Railway land will be provided for such hubs on license basis initially for a period of 7 years. The license fee shall be payable as per extant policy. Automobile and ancillary hubs shall be a common user facility for general use of the automobile industry, without any exclusive right.

The policy formulation comes in the wake of the announcement made by the Minister of Railways Mamata Banerjee in the Railways Budget 2010-11, wherein she has stated that there was a need of the hour to develop new business models and invite domestic investment through PPP mode in areas like new lines to world class stations, auto hubs to ancillary industries, manufacturing units of rolling stock to multi–modal logistic parks, high speed train corridors to port connectivity and multi-level parking to mine connectivity etc. Earlier the Ministry of Railways has finalized a policy on Private Freight Terminal (PFT) with the participation of the private sector and also finalized a 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 the policy on development of automobile and ancillary hub is to increase the modal share of Railways in transportation of automobiles, which is one of the fastest growing industries in India. With the induction of high capacity auto carriers, having higher throughput as planned by the Indian Railways and as proposed under Automobile Freight Train Operator (AFTO), more number of rakes will be inducted with competitive freight structure. This will increase Indian Railways’ modal share in automobiles traffic, warranting development of more automobile and ancillary hubs to facilitate end to end logistics.

Development of automobile and ancillary hubs will provide an opportunity to automobile manufacturers to carry their traffic by rail in bulk and do secondary distribution to consuming centers in the immediate catchments areas from such hubs. Similarly they can also do aggregation of automobile at such hubs so as to offer full rake load to railways. This will improve rail co-efficient of the commodity.

The policy document also include eligible criteria, license fee and other relevant details which can be seen at Ministry of Railways’ website http://www.indianrailways.gov.in


Rlys SFTO scheme for goods transportation

ALLAHABAD: Indian Railways has launched a Special Freight Train Operator (SFTO) scheme to facilitate private players to invest in wagons and earn profits through transportation of commodities. Through this scheme, operator would privately own the freight train for transportation of identified commodities.

The objective of this scheme is to increase the share of railways in transportation of non conventional traffic in high capacity and special purpose wagons, thereby increasing commodity base of rail traffic. This will facilitate induction of better design of wagons to increase throughput per train. This policy provides an opportunity to logistics service providers or manufacturers to invest in wagons and use advantages of rail transport to tie up with end users and market in train services owned by them for rail transportation of selected commodity which would be beneficial for railways private players.

In this connection, GD Brahma, executive director of freight marketing in Indian Railways has written letters to chief commercial managers and chief mechanical engineers of all the zonal railways including North Central Railway apprising them about the scheme.

Special Freight Train Operator will operate between private terminals equipped to handle SPW (Special Purpose Wagons) for which SFTO must have a tie-up with such private terminals or own its private terminals/sidings for handling of such trains. The commodities which would be transported through SFTO have been divided into four categories. In the fist category, there are bulk fertilisers, bulk cement and fly ash. In the second category, there are bulk chemicals and petrochemicals (excluding petroleum products like naphtha, aviation turbine fuel, high speed diesel, kerosene oil, petrol, black oil, LPG) and bulk alumina. In the third category are the steel products requiring specially designed wagons and in the last category there are molasses, edible oil and caustic soda.

The SFTO scheme has diverse facets. This included that trains purchased under SFT scheme will not be merged in the wagon pool of Indian Railways. Rakes comprising of such wagons will be identified as exclusively belonging to the SFTO who has procured them. Since the rebate will be applicable on the specific rakes for a specific period, each rake will have separate identification with date of commercial commissioning.

The SFTO will have a tie up with the end-users for marketing and arranging traffic. As far as the Indian Railway’s liability is concerned, the SFTO will be the Consignor and Consignee for the consignment for which Railway receipts will be issued by railway commercial staff posted at the terminal.

The SFTO will develop its own terminal or tie up with private sidings/terminals as per extant rule for loading/unloading of traffic moved in SFT. In case of tie up with other private terminals, the SFTO shall submit a copy of agreement to this effect with the private terminal operator for such movement to the concerned Zonal Railways. Indents for loading in such trains will be placed at the nominated loading point/terminals for the nominated destination point.

The rakes may be used by IR for traffic offered by customers other than the SFTO subject to a prior mutual written agreement between IR and such SFTO. To ensure a level plying field, IR shall move the trains of SFTO on the basis of “first come first served principle” without giving any undue preference to any particular operators.

However, railway administration would also make all efforts to ensure minimum enroute detention to the SFTO trains and strive to achieve the average speed of freight trains in respect of transit time of SFTO’s trains.

Freight Operation Information System (FOIS) of Indian Railways shall also cater to the requirements of the operator for an integrated management and operations information service and the operator shall provide all relevant data as required by FOIS and shall be given `read only’ access to this system on payment of reasonable cost.

The operator would charge his customers for rail haulage, terminal handling, ground rent on a market determined basis and railways shall not exercise any control over such pricing.

There would be no demurrage charges by the Railways, but the Railways shall levy stapling charges as per the rates notified from time to time in case rolling stock belonging to the operator is stabled on account of the SFTO on Indian Railways network.