A day after the Union Cabinet approved the revised policy on the long-term leasing of the Railways Land and planned to develop 300 Gati Shakti Cargo Terminals, Railways Minister Ashwini Vaishnaw on Thursday said the move would help the national transporter garner a larger share in freight transport, thereby increasing the Railways revenues.
Mr. Vaishnaw on Thursday added that post the launch of the ‘Gati Shakti Multi-Modal Cargo Terminal (GCT)’ policy in December last year, the government had received a very good response from the industry. “The target of 300 terminals is a very achievable target. We already have 150 firm proposals -- about 93 applications have been received to build terminals and about 65 entities have expressed their interest,” the minister said.
A senior Railways official added that the Indian Railways expected incremental revenues of at least ₹30,000 crore per annum from freight services post-development of the 300 ‘Gati shakti Cargo Terminals’ over the next five years. Additionally, the setting up of these terminals was expected to generate direct employment for 30,000 people and 90,000 indirect jobs.
“We will start getting incremental freight revenues as the terminals are being developed in the next five years... Once all the 300 are developed, the Railways will get additional revenues of at least ₹30,000 crore. This estimate is very conservative,” the official said.
Meanwhile, the minister also clarified that there would be no change in the policy for existing terminal holders, including PSUs such as CONCUR, Food Corporation of India, COAL India Ltd and Steel Authority of India. “For all PSUs, there was already a 30-year lease policy and we have consciously made a decision that we will not be changing the terms and conditions for the existing cargo terminals. We don’t want any favourable or unfavourable treatment. The new players will come through a transparent bidding process.”
He, however, added that once the lease ended, the existing players would have the option to switch to the new policy via the bidding process.
The Minister also stressed that the role of Railways was crucial to bring down the logistics cost of the country, which would help make India a more competitive market.
“Hypothetically, if an economy is served only by roads, its logistics cost is 17-18% of GDP and if it is served 100% by the Railways the logistics cost is 6-7%. So, the difference is huge. The Railways is highly economical. If we want to reduce the logistics cost of the country, we need to move cargo away from roads and to Railways. In India this cost is about 13-14% of GDP presently...,” he said.
“We already have 150 firm proposals -- about 93 applications have been received to build terminals and about 65 entities have expressed their interest”Ashwini VaishnawUnion Railways Minister