Railways to allow corporates to run own freight trains, move may pave way for private passenger trains

Many of the private companies, including Tata Steel, Adani Agro, Kribhco and several others, have their own private terminals.

Indian Railways will soon allow private companies to run freight trains from their own private terminals, a move which could potentially break the monopoly of the national transporter on the country’s rail roads.

Companies from sectors such as cement, steel, auto, logistics, grains, chemicals and fertilisers have evinced interest in having their own fleet under the special freight train operations scheme of the railways, a senior rail official said.

“Through these private terminals, we’ll be able to add almost 20-25 million tonnes of additional loading capacity. The demand for all commodities other than coal have seen an uptick. So, we expect companies from various sectors to come forward and invest in their own terminals at their plants or any other convenient location,” the official said, adding, “They will also be able to run their own trains.”

If successful, it could pave the way for running private passenger trains eventually.

Many of the private companies, including Tata Steel, Adani Agro, Kribhco and several others, have their own private terminals.

For the current year, railways has decided to allow 55 private freight terminals in the country at an investment of Rs 5,000 crore.

In FY17, Indian Railways outperformed its revised targets and did a loading of 1,107 million tonne, a record high.

For the current financial year, railway minister Suresh Prabhu has set a loading target of 1,200 million tonne.

Under the freight train operations scheme, companies can lease rakes from Indian Railways or have their own rakes manufactured as per their specifications and run them entirely as per their convenience on the existing rail network from their own private freight terminals.

However, the train operations will still be managed by railways and companies will have to pay track and other usage charges to the national transporter.

“As we’ll soon set up the rail development authority, which will recommend fares, there will be transparent mechanism to set usage charges for these operators. This will also break the monopolistic view that railways has had on freight operations,” the official said.

Indian Railways is slowly moving to bring in more private investment in the areas which are of high traction for private companies.

The national operator recently moved the idea of leasing out its iconic hill railways, including Darjeeling, Kalka-Shimla, Matheran and Nilgiri, to private companies for operations.

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