December 03, 2008

Indian Railways unveils new wagon leasing schemes

Exim News Service reported that union railway ministry has unveiled two schemes namely wagon leasing scheme and the liberalized wagon investment scheme, which will allow private companies to own and lease wagons, hitherto the prerogative of the Indian Railway Finance Corporation.

Under wagon leasing scheme, high capacity wagons with a payload of at least 2 tonnes more than the prevalent 25 tonne and 22.9 tonne axle load wagons or special purpose wagons for specific commodities can be owned and leased out by private companies.

Companies with a net worth of at least INR 250 crore and with a minimum experience of 5 years will be eligible for the scheme. Such companies will have to pay a one time registration fee of INR 5 crore to Indian Railways. This will be valid for a period for 20 years, after which extension can be given for 10 years based on the performance of the leasing company.

Wagon leasing firms will also get freight discounts between 12% and 15%. High capacity wagons with a payload of 2 tonnes or more will get a freight discount of 12% and 0.5% for every additional tonne for 20 years based on the current freight rate.

Liberalized wagon investment scheme will also work on similar lines as the leasing scheme. Private companies manufacturing commodities such as fly ash, fertilizer, etc can invest in high capacity wagons. However, profitable commodities like coal, coke, ores and minerals are exempt from this scheme.

The companies will procure wagons rake wise, along with some spare wagons directly from manufacturers or import them. They will then have to be certified for safety and specifications. Their wagons, however, will not be merged with Indian Railways’ rolling stock.