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Lalu puts private sector on rails

The Railways has finally decided to allow private parties to run container trains for both domestic and import-export traffic.

india Updated: Jan 08, 2006 00:02 IST

The Railways has finally decided to share its business with the private sector. It will now allow private parties to run container trains for both domestic and import-export traffic.

On Thursday, Railway Minister Lalu Prasad Yadav said the containerised import-export traffic was growing at the rate of 15 to 20 per cent per annum. Over the next five years, it could reach a volume of 110 million tonnes (current level: 55 million tonnes).

The railways also has one-third share in the total annual domestic traffic of about 2,000 million tonnes. This market too is growing.

In keeping with his last rail budget promise, Lalu has invited private parties to enter the business that has till now been exclusively held by the Container Corporation of India.

The scheme says the private parties will provide the wagons while the railways will provide the engines. The running of the trains will be under the railways' control.

The scheme is open to all registered Indian public or private companies, persons, either individually or in joint venture.

The railways hope to earn hefty registration fees from the operators. The operators will charge customers for rail haulage, terminal handling and ground rent on a market-determined basis. The railways will not exercise "any control over such pricing".

The private operators, which will help the railways retain its hold over the high-value container traffic, will be free to run any number of trains without any minimum or maximum limit.These trains are expected to ensure speedy clearance of traffic and improve the quality of service.

Besides the high-value business, the operators will have the advantage of having their trains despatched in a non-discriminating manner on a first-come, first-served basis.

They will benefit from the railways' well-developed freight operation information system which manages the entire goods traffic. The operators will have the option to exit from the market or transfer the permission to another
operator.

First Published: Jan 08, 2006 00:02 IST