Indian Railways’ private freight terminals (PFTs) appear to be catching up slowly. A host of companies, including Tata Steel, Kribhco Rail Infrastructure, Concor, Sahani Logistics, India Glycols-backed Kashipur Infra Freight Terminals, Central Warehouse Corporation, and Rajasthan Spinning Mills are queuing to be operators.
The Ministry now has close to 35 proposals for PFTs from 22 companies. Of this, the Railways has notified eight terminals, approved 15 and the remaining are under consideration. Setting up a PFT will require Rs 100-150 crore.
The gene-pool of companies is varied — logistics players, container train operators, mining companies such as Goa-based Fomento Group, and commodity trading firms such as Navkar Group.
WHY PFT
A PFT operator can handle various types of goods for the Railways and provide value-added services such as storage and distribution. This is different from private rail sidings where Railways permitted specific type of cargo to be handled, usually on a captive use basis for use by the company that built the siding.
There were two reasons for Railways to come out with a PFT policy, apart from the fact that land acquisition has become difficult.
First, private good sidings that were built years ago in outskirts are now a part of the cities.
These sidings, which are small going by the current norms, and cannot accept or despatch cargo during the day as large trucks entries are restricted for most part of the day. So, the rail freight customer evacuates cargo and moves to another distribution point. PFTs — which will be much larger and located in outskirts — are expected to eliminate this layer of handling and reduce costs for customers.
Also, by allowing companies to earn revenue by handling cargo of various types, the Railways expects to get some incremental cargo, and attract some cargo from the road as well.
BROWNFIELD BUSINESS
Many rail private sidings are converting their sidings to PFTs. Close to half the PFT proposals are brownfield.
Many container train operators are also converting their inland container depots (ICDs) to PFTs so that they can handle non-containerised cargo as well.