Feb,22,2011 By Souvik Sanyal,ET Bureau
Launched in 2008, the scheme had failed to take off with firms blaming its stringent conditions.
The railways has now lowered the eligibility bar for companies, extended the validity of the one-time registration and given more freedom to firms in sourcing of wagons, a senior railway ministry official said.
According to the new norms, a company with a net worth of 100 crore could operate under the Wagon Leasing Scheme. The earlier norms required a company to have a net worth of at least 250 crore.
The railways has also extended the validity of the one-time registration to 35 years with a provision for further extension on payment of registration fees. Industry had raised concerns over the 20-year validity prescribed under the old norms. Although, the scheme allowed an extension of 10 years, industry said the period was short to recover investments made in the capital-intensive business.
The new norms also allow the leasing company to purchase wagons from container train operators, special freight train operators, automobile freight train operators and end users.
It also allows a company to import wagons and lease them to private container operators and the railways.
To streamline the policy of rebate, the Railways has said that the rebate approved will be the same as given under the scheme under which the wagons were procured.
It has, however, introduced provisions for imposing charges on the company if the train suffers detention due to them.
"Railways need to somehow ensure that leased services run by it and supported by industry gets preferential treatment," Vineet Agarwal, Executive Director, Transport Corporation of India , said in a recent note. "If they fail to look at this point seriously, industry may rethink on going for leased services on long-term basis as erratic delivery timelines have defeated the very purpose of leased services, USP of which was time-bound services."
Companies such as General Electric , Srei Infrastructure Finance and Adani Logistics had initially shown interest in the Wagon Leasing Scheme, which was proposed in the 2008-09 Railway Budget. It was aimed at developing a strong wagon-leasing market by encouraging third-party leasing to bring in better-quality wagons.
But the scheme was bogged down by tough conditions.
Stung by strong resistance from the industry over a majority of its schemes under the private-public partnership mode, the railways now seems to be making amends in its approach.
In November 2010, Railway Minister Mamata Banerjee met industry representatives to garner support for the projects launched under the public-private partnership mode. At that time, the industry had raised with her issues concerning the Wagon Leasing Scheme also.
Tags: General Electric, Srei Infrastructure Finance and Adani Logistics, private-public partnership schemes