Plan for new cargo terminals along DFC

Top global and domestic firms are keen to develop and operate multimodal logistics parks, freight terminals and parcel terminals along India’s dedicated rail freight corridor network. Among them are Adani Logistics, CONCOR, DP World, CMA CGM, JM Baxi, PSA International, APM Terminals, TVS Logistics and Gateway Rail Freight.

The Dedicated Freight Corridor Corporation of India Ltd (DFCCIL) is looking at companies that can own and operate private freight terminals (PFTs) near stations to garner more cargo to its network.

The plan is to permit private firms develop and manage these terminals on their own land located near DFC railway stations, which will be linked by rail, sources said.

DFCCIL also has its own land parcels near the track which it plans to later develop.

The private developer who wins the right to operate a terminal on its own or leased land will book cargo for all customers who want to load and unload cargo from that station for a 30-year period.

For the first 10 years of the contract, the operator will have the exclusive right to handle goods from the station, after which other users can be allowed to manage goods, too.

The PFT operator will collect from its users a mix of handling charges as decided by the Indian Railways and for various value-added services.

The rights to operate the terminal and provide exclusive, rail-linked access to each DFC station will be awarded to companies who own large and contiguous land parcels, and meet the turnover criteria set by DFCCIL. In case there are multiple players vying for the 10-year exclusive rights to a station, the player with largest average turnover will get the right to run the terminal.

The DFCCIL has decided against opting for a revenue share model or other such parameters to develop PFTs to attract maximum cargo on the DFC network. This also fits with India’s core strategy of lowering logistics costs.

Companies eyeing PFTs, though, have concerns on the duration and extent of exclusivity that will be maintained, as there could be other goods-booking facilities — such as those connected to a nearby track of Indian Railways — in the vicinity, an industry official said.