Railwaysâ€™ Policy on Automobile Freight Train Operator Scheme
New Delhi | Wednesday, Aug 11 2010 IST
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 per cent 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. According to a Railway Ministry release issued here today, this policy has become effective from July 19. Under this policy, for the first time, private players are 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 this a policy on development of automobile and ancillary hub at strategic locations for storage and secondary distribution by road has already been issued by the Ministry. 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 March 31 of last financial year, can apply. The policy formulation comes in the wake of the announcement made by Railway Minister Mamata Banerjee in the Railways Budget 2010-11. She has stated that there was a need of the hour to develop new business models and invite domestic investment through Private Public Participation (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. Earlier, the Ministry 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. It has 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.
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