The moratorium will impact companies such as Tata Steel and Jindal Steel and Power Ltd (JSPL) as well as units of the JSW Group that have been running wagons under the scheme.
A government official said there were growing concerns over congestion on the railway network in the coal and mineral-rich eastern states of the country where private wagons are predominantly deployed. Indian Railways has issued an order putting on hold any fresh applications for induction of wagons.
“Around 100 such privately owned rakes (one rake has 40-60 wagons) have already been inducted onto the Indian Railways network. Another 500 rakes are under various stages of approval under the scheme,” another official said.
‘Need to Expand Track Network’
The applications already admitted will continue to get incentives and approvals, he added.
Typically, a railway rake moves from point A to B where it unloads the cargo, and then moves to point C where it reloads for the return journey. The private sector, however, does not load on return journeys, and the movement of empty rakes is seen as causing congestion.The General Purpose Wagon Investment Scheme has found takers in the private sector since its rollout in April 2018. The scheme – launched to attract private investment in wagons to reduce shortages – offers a host of concessions, including discounts on freight tariffs and provides branding rights.
The discounted tariff is available until the company recovers its capital cost. The demand for private wagons spikes during peak power consumption months when Indian Railways’ own wagons are largely allocated for coal, leaving less capacity for other commodities such as cement and steel.
The industry says there is a need to expand the track network through greater private participation.
