Indian Railways To Combat Wagon Shortfall In Freight Segment With ‘Buy Your Own Wagon’ Policy

With unavailability of freight wagons affecting business, the Piyush Goyal-led Ministry of Railways has decided to launch a new policy for both public sector and private sector clients. An Indian Express report says that state-run Indian Railways is launching a ‘Buy Your Own Wagon’ policy under which clients can purchase their own wagons and supply them during shipments.

The wagons in question are generic wagons as opposed to special-purpose ones, and the Railways is also looking at offering a 10 per cent rebate for fifteen years to those who bring their own wagons. Those who bring their own wagons can either use open wagons or closed ones.

The Railways had procured 8,000 wagons in 2017-18 at a cost of Rs 30 lakh each. The current fleet consists of 2.8 lakh wagons with 1.26 lakh of them being open, box-type ones. While the government does plan to procure additional coaches of its own, it wants the private sector to invest in some too.

The largest freight customer of the Indian Railways – Coal India – has evinced interest in the new policy, along with several cement manufacturers.

The policy is expected to come with a standard set of terms however. Customers looking to purchase wagons would have to get them from sources that have been authorised by the Railways in order to maintain standards. Further, they would have to get rout-specific permissions in order to prevent the Railways from running wagons beyond its capacity.

The rebate offered will also vary, based on the dynamic nature of freight lease changes. The rebate would not exceed the amount paid to the Indian Railways Finance Corporation (IRFC) that purchases the wagons and then loans them to the Railways.