Railways’ Policy on Automobile Freight Train Operator Scheme

In a significant policy initiative to increase the rail share of automobile traffic from present level of 3 to 4 per cent to about 30 percent in the next five years, the Ministry of Railways has formulated a policy on Automobile Freight Train Operator (AFTO) Scheme to attract private investment in high capacity auto carriers. This policy has become effective from 19th July, 2010. Under this policy, for the first time, private players permitted to use advantages of rail transport to market railway services to end users in the fast growing automobile sector.

This new policy will facilitate bulk movement of automobile traffic by rail from the production hubs to consumption centres for which a policy on development of automobile & ancillary hub at strategic locations for storage and secondary distribution by road has already been issued by the Ministry of Railways.

Logistics related companies and Wagon Leasing Companies with minimum one year experience and having a net worth of minimum Rs. 20 crore or 30 crore as annual turnover as on 31st March of last financial year, can apply.

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 formulated a policy on Private Freight Terminal (PFT) with the participation of the private sector, 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 and also formulated a policy on Development of Automobile and Ancillary Hubs to provide an opportunity to automobile manufacturers to carry their traffic by rail in bulk.

The policy document on Automobile Freight Train Operator (AFTO) Scheme also include eligible criteria, license fee and other relevant details which can be seen at Ministry of Railways’ website www.indianrailways.gov.in

AKS/HK/LK/TR
(Release ID :64615)