Railways to re-launch scheme letting operators run private freight rails

The Railways is all set to re-launch its special cargo rail operator (SFTO) scheme, thereby allowing operators to run private cargo rails to transport special commodities.

The move should improve privatization in goods movement as the scheme is perceived as more investor-friendly than the previous version launched in 2010. The scheme had failed to draw any interest from the industry at that time.

As per the new SFTO, private train operators would be allowed to load commodities like black oil, which was previously barred. The rebate period has been increased to 20 years from 8-10 years earlier, while the registration fee has been reduced in order to sweeten the deal for private players.

“The SFTO scheme has been reworked according to the industry demands to offer a push to private investment in goods movement. The period of rebate that was earlier 12% for 8-10 years has now been increased to 20 years and the registration cost has also been reduced,” said a Railway Board statement. Under the scheme, an operator can privately own a cargo rail that would be used for transportation of identified commodities using the rail infrastructure.