ADVANCE RATES NOTIFICATION FOR RATE ADVICE No.

06 OF 2010

(GOODS No. 75 / 2010)

Sub: Policy on Private Freight Terminal (PFT).

@@@

The newly formulated policy on Private Freight Terminal (PFT) is appended

below. The policy will come into force with immediate effect. This policy has been
envisaged with the objective of participation of private sector in development of
freight terminals to handle third party cargo. The policy not only entails
development of Greenfield PFT but also provides for conversion of existing private
sidings to PFT.

(Authority: Railway Board’s Freight Marketing Circulars No. 14 &15(Corrigendum) of 2010,

Letter No. 2008/TC(FM)/14/2 dated 31.5.2010 & 14.6.2010.)

(The previous Rate Notification

Issued was Goods No. 74/2010 reg.
Special Freight Operator (SFTO) Scheme.)

For Chief Commercial Manager

SOUTHERN RAILWAY Headquarters Office,

Commercial Branch,
Chennai-600 003.
No.C.496/ III/ PFT Date: 18.06.2010.

C/- Secretary to GM for the information of GM.

C/- CCM CCM/PS CCO COM CFTM Dy.CCM/FM & Dy.COM/Goods.

C/- Sr.DCMs MAS TVC PGT MDU TPJ SA. They will circulate the policy to
prospective investors and give wide publicity.

C/- FA&CAO/Efficiency Cell, AAO/Goods/MAS, DTMR/HOM

AAO/SN/MAS, PDA/RC.I/MAS, PDA/RC.II/MAS, PDA/TA/MAS, PDA/TA/TPJ DA/TA/TPJ
MAS, CVO/T/MAS, ZTC/TPJ, AO/ TN, SCM/M&S, Sr.AFA/T/MAS SCM/Claims/MAS,
TM/HOM, AM/ERS, AO/MAQ, AO/ED, AO/TNPM, ACM/SO.

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C/- CGS/RPM, KPD, MLPM, SA, SAMT, CGL, AJJ, IGU, ERM, CBE, CBF, ED, PGT, WH,
MAQ, TCR, MTP, CHTS, MTDM, QLN, KON, TEN, TN, TPGY, MVN, AWY, KOKG, HOM,
TUP, TNPS CS, NLE, CKI, VAPM, BDJ, KUL.

C/- CCMs SC Rly/SC C.Rly/CSTM W Rly./CCG SE Rly/GRC E Rly/CCC

NEF Rly/GHY NE Rly/GKP N Rly/NDLS SW Rly/UBL EC Rly/Hajipur E Co Rly/BBS NC
Rly/ALD NW Rly/JP SE Central Rly/Bilaspur WC Rly/Jabalpur
C/- Chief Operations Manager, Konkan Railway Corporation Limited, Belapur Bhavan, CBD
Belapur, New Mumbai-400 614. C/- GM/CRIS/Chanakyapuri/NDLS
C/- RT(3) RM & RQ(2) R.sdg. (2) RO(1) CCI/Rates(3) CCI/Marketing(2) .

/Chief Commercial Manager

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 DEVELOPMENT OF PRIVATE FREIGHT TERMINAL (PFT)
1.0 OBJECTIVE
1.1 The objective of the policy is to -
i) Enable rapid development of net work of freight handling terminals with
the participation of Private Sector.
ii) Enhance the presence and share of railways in the overall transport chain.
iii) Divert high rated finished traffic so far predominantly moving by road to
rail and attain increased rail freight volumes by offering integrated,
efficient and cost effective logistics and warehousing solutions to users.
1.2 This policy seeks to supplement the in-house programme of MOR by opening
the area of terminal development with participation of major logistics service
providers to create world-class logistics facilities.
2.0 DEFINITIONS
In this policy, unless the context otherwise requires -
2.1 “Act” means the Railways Act 1989.
2.2 “Brownfield” means a terminal commissioned by the conversion of an
existing siding/terminal etc. on private land, to PFT.
2.3 “Commercial and Operating rules” means the prevailing rules and their
amendments issued from time to time as per the Commercial and Operating
Manual, Tariffs, Schedule, Code and Instruction issued by Railways or
Railway Board.
2.4 “Greenfield” means a new PFT commissioned on private land, under the
provisions of this policy.
2.5 “IR” means Indian Railways.
2.6 “MOR” means Railway Board, Ministry of Railways.
2.7 “Logistics Service Provider” means a company engaged in business of
providing any one or more services, which include rail/road/sea/air
transportation, air cargo, cargo consolidation, ware housing, Inland Container
depot, cold chain services, port terminal services, Third Party logistics or
Fourth party logistics.

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2.8 “PFT” means Private Freight Terminal developed by private party on private
land, to handle freight traffic moved by train in accordance to this policy.
2.9 “TMC” means Terminal Management Company, who is the owner of PFT.

3.0 THE SCOPE

3.1 Unless otherwise specified by IR from time to time by suitable notification or
any other means of communication, a PFT under this policy would be
permitted to book and handle all traffic excluding outward coal, coke and iron
ore traffic.
3.2 PFTs shall be set up only on private land. However, for rail connectivity
railway land can be offered as per extant rule.
3.3 Unless otherwise specified by IR from time to time by suitable notification or
any other means of communication, all types of wagons permitted to run on
IR network shall have access to the PFTs.
3.4 The policy will be applicable on Indian Railways excluding Railway
infrastructure created/to be created on non Indian Railway line like Port
Railway Lines, DFC etc.
3.5 Depending upon demand and business plan, PFTs would provide various
logistics related services like warehousing facilities, value addition services
like palletization, labeling , processing of goods with adequate inter modal
facility and convenience centre etc.
3.6 Setting up of a terminal exclusively for container traffic by Private Container
Train Operators (PCO) will be governed by the Concession Agreement
signed between PCO and Railways. However, if container terminal is
converted to a PFT it will be governed by this policy.
3.7 Private sidings/terminals set up on private land on IR network can also apply
for becoming a Brownfield PFT and shall be governed under this policy.
3.8 Private sidings/terminals set up on private land on IR network and where third
party cargo has already been permitted (on co-user basis or otherwise), shall
also have to apply for becoming a Brownfield PFT and shall be governed
under this policy.
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4.0 FACILITIES TO BE DEVELOPED
The facilities required to be developed at the PFTs shall include the
followings -
4.1 The PFT developed by TMC shall function round the clock on all days
including Sundays.
4.2 The facilities to be developed for handling traffic shall be in accordance with
EOL concept adhering to the free time prescribed for EOL.
4.3 Depending upon cargo proposed for handling, adequate rail infrastructure
capable for handling full rake in one hook with direct reception & dispatch
facilities and equipped with appropriate handling arrangements, warehousing,
stacking area circulating area have to be provided.
4.4 The minimum facility required to be developed in a PFT will be broadly based
on the following norms -
(a) For handling minimum 2 rakes per day, PFT should have one
handling (loading/unloading) line, one engine escape line and one
brake van reversal line.
(b) The number of handling (loading/unloading) lines shall increase
in proportion to the number of rakes proposed to be handled in a
PFT for eg., if four rakes are to be handled per day there should
be 2 handling (loading/unloading) lines along with one engine
escape line and one brake van reversal line.
4.5 Depending upon the traffic proposed, appropriate handling equipment shall be
provided.
4.6 The terminal will be equipped with appropriate infrastructure and handling
equipment to handle inter-modal transfers such as external and internal roads,
parking space, circulating area, public convenience center etc.
4.7 Rest room, for crew and guard will have to be provided by the TMC at PFT at
its own cost.

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4.8 TMC will also permit the train crew to avail the facilities of staff canteen in
their premises if available, on payment of charges as prescribed for their own
staff.
4.9 TMC shall also provide an in-motion weigh bridge as per extant rules at the
entry point of the PFT in such a manner so that all incoming and outgoing
rakes can be weighed.
4.10 FOIS and TMS with limited access as prescribed by IR shall be installed at the
PFT and all costs related to FOIS/TMS will be borne by the TMC in
accordance with the rules applicable for a private siding.
4.11 All freight/haulage charge will be paid by the consignor/consignee to railways
at the time of preparation of RR through E-Payment system. Under charges, if
any, shall also be borne by the consignor/consignee.

5.0 APPLICATION FEE

5.1 In case of ‘Greenfield’ projects the applicant will have to deposit Rs. 1crore as
application fee at the time of making an application to Railway for PFT.
5.2 In case the approval is not given for whatsoever reason, 99% of the same will
be refunded after completion of screening of applications; and within one
month of refusal.
5.3 In case approval is granted, the application fee will be retained by the
Railways.

6.0 SECURITY DEPOSIT

6.1 In order to ensure timely completion of the PFT within the stipulated time
frame, a security deposit of Rs. 1 crore will be collected at the time of
granting of approval to the PFT.
6.2 On successful completion of the PFT, within the stipulated time frame, 99%
of this Security Deposit would be refunded back. Otherwise the entire amount
would be forfeited along with cancellation of the approval given, if not
extended in accordance with para 9.16 of this policy.

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7.0 REVENUE SHARING
There will be revenue sharing between the TMC and railways for all
commodities as follows -
7.1. For ‘Greenfield Projects’, revenue sharing will start after 5 full years of
commissioning of the PFT (excluding the financial year of commissioning).
7.2. For ‘Brownfield Projects’, revenue sharing will start after two full years of
commissioning of the PFT (excluding the financial year of commissioning).
7.3. After notification of the PFT scheme, revenue sharing up to the 5th years
(from the year of issuance of the scheme) will be at 50% of the then
prevailing rate of terminal charge leviable at railway goods sheds or Rs. 10/-
per ton whichever is higher.
7.4. From the 6th year onwards, revenue sharing will be annually increased by
indexing it to 90% in the WPI increase which is the inflation figure in %age
as published by Government of India. The revised rate of revenue sharing
will be notified annually by Railway Board. For example, if the inflation for
the year 2008 – 09 has been 8%, then the rate of revenue sharing for the year
2010 – 11 will be increased by 7.2% over the rate prevailing in the year 2009
– 2010. However, in case there is a decrease in WPI, the prevailing rate of
revenue sharing will continue.
7.5. The extent of revenue sharing as stipulated above shall be the same for all
PFTs irrespective of when the TMC came in or when the siding/terminal was
converted to a PFT. For example a TMC who starts business in the 1st year
after issue of scheme and another TMC who starts business in the 10th year
after issue of the scheme, shall have the same revenue sharing from the year
when it is due for them.
7.6. In case existing siding is converted to PFT, revenue sharing will be done on
traffic which pertains to customer other than the siding owner. If a container
terminal is converted to PFT, revenue sharing will be for other than container
traffic.

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8.0 CONCESSION AGREEMENT
8.1 The period of Concession Agreement for operation of such PFT will be 20
years, further extendable by one period of 10 years by mutual consent of IR &
TMC. Further extension, if any, can be granted subject to review by IR on the
basis of the extant policy at the time of such extension.
8.2 After all approvals, a concession agreement shall be signed between the
Terminal Management Company and CCM of the zonal railway before the
commencement of operations at the PFT.

9.0 GENERAL CONDITIONS

9.1 The terminal infrastructure inside PFT would be developed for full rake
handling on all handling lines with direct reception and dispatch facilities,
engine escape line and brake van reversal line depending upon the volume of
traffic to be handled as detailed in para 4.4 of this policy.
9.2 Train Operation in the PFT shall be on the Engine on Load (EOL) norm as per
free time specified from time to time. The locomotive by which the train has
arrived shall remain in the PFT during entire loading/unloading operation.
Loco detention charges will be leviable beyond the prescribed free time for
loading/unloading under EOL norms as per IR’s extant policy on EOL and as
per prescribed rates for All India Engine Hire Cost.
9.3 Construction of PFT will be as per provision of private siding policy and
therefore all charges stipulated in the extant policy for construction of a
private siding would be applicable on PFT. PFT connectivity will be permitted
only from one of the existing crossing stations of IR which shall be nominated
as the serving station. No PFT will be permitted from mid-section, however,
in case a take off is essential from mid section, the same can be permitted by
the zonal railway in accordance with the extant policy guidelines.
9.4 Railway commercial staff will be posted at the PFTs to carry out commercial
function related to booking/delivery of freight carried in wagons.

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9.5 The TMC will pay cost of maximum one commercial staff per shift. However
in case there are more than one handling area which cannot be supervised
from one location, cost of additional commercial staff subject to maximum of
one commercial staff per shift per handling area will also be borne by the
TMC.
9.6 Freight charges or haulage charges as the case may be shall be paid by the
consignor as per the prescribed rate from time to time.
9.7 Consignment booked from and to PFT will be pre paid. The consignment
booked to PFT will be consigned to the consignee, for which the TMC shall
give consent to handle the traffic of the said consignee so that traffic booked
for the terminal is unloaded with out any detention to rolling stocks. To
prevent incidence of non acceptance of trains at the PFT, for inward traffic to
PFT, the consignor shall have consent of concerned TMC and a copy of the
consent letter should be made available at the booking station while booking
the rake. Rake booked to PFT will be unloaded by the TMC with out any
liability of IR.
9.8 For the outward booking from the PFT, the TMC will enter into an agreement
with the consignor and submit a copy of the agreement with the Railway
Commercial staff posted at the PFT.
9.9 All “Commercial and Operating rules” as applicable in a Goods shed for
booking, supply and delivery of goods shall be applicable at the PFT.
9.10 Freight on traffic booked from and to PFT shall be charged on through
distance basis as per Public Tariff.
9.11 Demurrage charges shall be levied as per the extant rules and will be payable
by TMC to the Railway.
9.12 In case of detention of rake short of the PFT for want of room or for the
reason attributed to Terminal Management Company, railways will levy
stabling charges on privately owned wagons provided they are stabled within
a radius of 100 kms from the PFT. The stabling charges shall be payable at the
rate as prescribed from time to time and such charges will be leviable on

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 TMC. In case of general purpose wagon restriction rules as existing for
private siding and goods shed should be applicable.
9.13 Railways liability as a bailee for the claims for loss, destruction, damage,
deterioration or non-delivery of any consignment will not extend beyond the
handing over of the rake to TMC at the nominated line inside PFT after which
the entire liability would rest with the TMC. Similarly for the outward traffic,
Railway’s liability would begin only after the goods are loaded into wagon
and handed over to Railways. TMC shall indemnify Railways from claim, if
any, preferred by the consignors/consignees on the Railways for any loss,
destruction, damage, deterioration or non-delivery of any consignment in full
or part during the period such liability rests with it.
9.14 TMC shall indemnify railway for any damage to railway property including
rolling stock and injury or loss of life arising out of any negligent act or
omission or breach of any of its obligations under the concession agreement
by the TMC. Similarly, subject to the provisions of Railway Act and rules
made there under, Railway Administration will indemnify the TMC against
any negligent act or omission or breach of any of its obligations under the
provision of the concession agreement.
9.15 Terminal Management Company would be responsible to get all statutory and
non-statutory clearances that may be required from other government
departments and statutory bodies for setting up and to operationalize such
PFT. TMC will be responsible for payment of all taxes etc related to PFT
working.
9.16 Gestation period for setting up and to operationalize a green field PFT will be
a maximum of three years from the date of approval of the proposal by IR.
The gestation period for brown field PFT (the conversion of an existing
terminal to PFT) will be one year. Unless otherwise extended in writing by IR,
failure to adhere to this time limit would lead to cancellation of such approval
without any liability of Railways. However, Railways can extend the gestation
period for operationalization of Greenfield or Brownfield PFT keeping in

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 view unforeseen exigencies etc. on payment of penalty @ 20% of the security
deposit per year or part thereof, for a maximum period of 2 years.
9.17 No Rail Transport Clearance (RTC) will be required for setting up of PFT.
9.18 However, if a new industry intends to set up a industrial siding cum PFT, then
before setting up of the industrial siding cum PFT, RTC as per extant rule will
have to be obtained.
9.19 A Concession Agreement will be signed between TMC and IR detailing the
terms and condition for operation of PFT. No PFT will be commissioned and
notified unless agreement for PFT has been signed.
9.20 The CCM of the concerned Railway will declare open the PFT as an
independent terminal through a Commercial Notification.

10.0 ELIGIBILITY CRITERIA

10.1 The company should be an entity registered in India under the Companies
Act, 1956.
10.2 The company which fulfills any one of the following criteria can apply under
the policy subject to having a net worth of Rs. 10 crore or having a turnover of
Rs. 20 crores as on the last day of the previous financial year -
(i) having logistics service as core business of the company with
minimum one year experience in the field or;
(ii) be an existing container train operator or;
(iii) be an end user of railways with a private siding.
(iv) any industry intending to set up a private siding cum PFT.

11.0 LAND FOR DEVELOPMENT OF PFT

PFT will be developed on land owned or taken on lease/license by the TMC.
The connectivity to Railway line through Railway Land will be facilitated by
Railway as per extent rules on payment of license fee.

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12.0 PROCEDURE FOR SETTING UP A PFT
12.2 A Terminal Management Company intending to develop a PFT on privately
owned land shall apply to zonal railway with his proposals covering the
followings:
(i) Documents for land ownership/30 years lease, for setting up the
proposed PFT.
(ii) Anticipated Commodities proposed for handling and expected
volume.
(iii) Any other documents as specified by the Railways
12.3 The zonal railway shall examine the proposal from operational feasibility
considering terminal capacity in and around the area; quantum of traffic that
can be carried over the particular section with the present line capacity, future
utilization and concurrent line capacity works in the pipeline or likely to be
proposed over that section.
12.4 Application received will be screened by a Committee of HODs comprising of
CTPM, CCM/FM, CPDE and FA&CAO/HQ. The Committee’s
recommendations will be considered by the GM for granting in principle
approval or otherwise within 100 days.
12.5 In case more than one applicant applies for PFT at the same location, the
quantum of traffic to be handled at such PFT and the consequential revenue to
be earned by Railways will form an important parameter in selection of
suitable applicant.
12.6 Zonal railway and the applicant/TMC should abide by following time
schedule –
For Greenfield PFT
i) DPR submission by the applicant : Three months after receipt of
Zonal Railway’s in principle
approval.
ii) DPR approval by zonal railway : One month on receipt of DPR
from the applicant/TMC.
iii) Engg. / bridge drawing submission : One month after DPR approval
by the applicant by Zonal Railway.
iv) Engg. Drawing approval by zonal : One month after receipt of
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 railway engineering drawings form the
applicant/TMC.
v) Bridge drawings approval by zonal : Two months after receipt of
railway. bridge drawings from the
applicant/TMC.

vii) The completion time of 3 years

will start after final approval is
given by zonal railway i.e.
approval of Engineering Drawings
or Bridge Drawings, according to
the requirement of PFT.

For Brownfield PFT

i) DPR submission by the applicant : One months after receipt of Zonal
Railway’s in principle approval.
ii) DPR approval by zonal railway : One month on receipt of DPR from
the applicant/TMC.
iii) Engg./bridge drawing submission : One month after DPR approval by
by the applicant Zonal Railway.
iv) Engg. Drawing approval by zonal : One month after receipt of
railway engineering drawings form the
applicant/TMC.
v) Bridge drawings approval by : Two months after receipt of bridge
zonal railway. drawings from the applicant/TMC.

vii) The completion time of 1 year will

start after final approval is given
by zonal railway i.e. approval of
Engineering Drawings or Bridge
Drawings, according to the
requirement of PFT.

13.0 NODAL OFFICE/AGENCY

ED/Freight (Mktg.), Ministry of Railways (Railway Board) would be the
overall nodal officer for the implementation of the policy. His contact details
are – ED(FM), R. No.469, Ministry of Railways, Rail Bhavan, New Delhi –
110 001. Phone No.43920 (Rly.), 23385222 (MTNL) and e-mail address
edfm@rb.railnet.gov.in.

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 At the Zonal Railways, Chief Traffic Planning Managers (CTPMs) would act,
as the nodal officers during construction and planning stage and thereafter
Chief Commercial Managers –Freight Marketing (CCM-FM) will be single
window nodal officer for such PFT.

14.0 BENEFITS TO TERMINAL MANAGEMENT COMPANY

14.1 Terminal Management Company gets rail access to handle third party cargo
and thereby providing him a business opportunity to augment his presence in
logistics chain.
14.2 Terminal Management Company shall recover various charges from its
customers for the use of PFT including Terminal charges, wharfage charges
and charges for other value added services provided at the PFT. Depending on
market, TMC will be free to fix tariff for such services at PFT owned by him.
14.3 Terminal Management Company will not be required to pay Wharfage
charges to the railways.

15.0 CHARGES PAYABLE TO RAILWAYS BY TERMINAL

MANAGEMENT COMPANY
15.1 All charges, surcharges, cess, levies, taxes etc. as per prevalent rules and as
modified from time to time.
15.2 Demurrage and stabling charges as per para 9.11 & 9.12 above.
15.3 Loco detention charges beyond the prescribed free time as per extant policy
guidelines.
15.4 All other charges as per extant Policy for private sidings.
15.5 Charges of licensing of railway land as per extant rules.

16.0 TERMINATION OF AGREEMENT

The agreement can be terminated by the Railways by giving a Notice of
Termination of 180 days to the TMC for any breach of terms and conditions
of the agreement, violations of the provisions of the Indian Railway Act or in
the event of default as defined in the agreement. Before issuing the

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 Termination Notice, Railway Administration shall by a written notice inform
the TMC to make a representation and may after expiry of 30 days, whether or
not, it is in receipt of such representation, issue the Termination Notice in
writing subject to the provisions in the agreement. The TMC will also have
the right to terminate the agreement by giving a notice of 180 days to the
Railway Administration. Any dispute arising out of the same will be resolved
through the Dispute Resolution Mechanism as prescribed under para 17.0 of
the policy.
17.0 DISPUTE RESOLUTION
17.1 In case of any dispute in interpretation of the policy, the decision of MOR will
be final and binding.
17.2 Any dispute in interpretation and implementation of the agreement, which is
not resolved amicably, shall be finally decided by reference to arbitration by a
Board of three Arbitrators appointed through a procedure which will be
clearly spelt out in the Agreement between the railways and the TMC. Such
Arbitration shall be held in accordance with the Rules of Arbitration of the
International Centre for Alternate Dispute Resolution, New Delhi and shall be
subject to the provisions of the “Arbitration and Conciliation Act 1996”.

18.0 REVIEW OF THE POLICY

18.1 IR will review the policy after one year of its issue.

******

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