Rlys expects `30K cr incremental revenue from freight services

Rlys expects `30K cr incremental revenue from freight services

New Delhi: The Railways expects an incremental revenue of at least Rs 30,000 crore per annum from freight services when 300 Gati Shakti cargo terminals will be operational, senior officials said on Thursday.

The Union cabinet on Wednesday approved a policy on long-term leasing of Railways' land as well as a proposal to develop 300 Gati Shakti cargo terminals over the next five years. The setting up of these 300 terminals is expected to generate employment for 30,000 people directly and 90,000 indirect jobs.

"We will start getting incremental freight revenues as the terminals are developed... Once all 300 are completed, Railways will get additional revenues of at least Rs 30,000 crore. This estimate is very conservative," the official said. Briefing reporters on the Cabinet decisions, Union minister Ashwini Vaishnaw on Thursday said that the ministry has got a very good response after the launch of the Gati Shakti Multi-Modal Cargo Terminal (GCT) policy in December last year.

The approved policy will help provide land leases for a longer period of up to 35 years as against five years at present. It is expected to generate about 1.25 lakh jobs. "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.

He also said that the policy will remain the same 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 existing cargo terminals. We don't want any favourable or unfavourable treatment. The new players will come through a transparent bidding process," he said.

Vaishnaw further said that once the lease ends, the existing players will have the option to switch to the new policy via the bidding process. He said that after decades of losing market share in logistics, last year Railways began to gain market share and once the 300 terminals are made, the Railways will get more cargo. The minister said that the Railways will play an important role to make India a more competitive market.

"Hypothetically, if an economy is served only by roads, its logistics cost is 17-18 per cent of GDP and if it is served 100 per cent by railways the logistics cost is 6-7 per cent. So the difference is huge. The railway 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 per cent of GDP presently..., he said.

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