Freight Marketing Master Circular 2022

Freight Marketing Master Circular 2018-19

General Purpose Wagon Investment Scheme

GOVERNMENT OF INDIA
MINISTRY OF RAILWAYS
(RAILWAY BOARD)

No. 2018/TC(FM)/04/01

Rail Bhavan, New Delhi – 110 001, dated 26.04.2018

General Managers
All Indian Railways.

Sub: GENERAL PURPOSE WAGON INVESTMENT SCHEME (GPWIS)

In view of the long term demand from Railway Freight Users (PSUs, Industries and other stakeholders) and to achieve the desired growth in freight traffic on IR, a policy on General Purpose Wagon Investment Scheme (GPWIS) has been formulated. The detailed guidelines of the General Purpose Wagon Investment Scheme (GPWIS) are enclosed as the annexure.

This scheme will come into force with immediate effect.

This issues with the concurrence of Finance Directorate of Ministry of Railways.

The receipt of this letter may please be acknowledged.

Sd/-
(Dr. Monica Agnihotri)
Executive Director Freight Marketing

Indian Railway Freight Advance Scheme 2018 Click Here

Source: indianrailways.gov.in

GENERAL PURPOSE WAGON INVESTMENT SCHEME

1.0 GENERAL

As there was long term demand from Railway Freight Wagons Users for better and timely availability of General Purpose Wagons (GPW) it has been decided by Ministry of Railways (MOR) to introduce a scheme for investment in General Purpose Wagons.

2.0 TYPES OF WAGONS PERMITTED FOR PRIVATE PROCUREMENT

General Purpose Wagons (BOX, BOXN, BCN etc.) approved by RDSO to run over the routes approved by Indian Railways. Special Purpose Wagons (specially designed to carry specific commodity or a group of commodities) will not be covered under this scheme.

3.0 APPLICABILITY OF THIS SCHEME

This scheme shall be applicable exclusively on the wagons inducted under this scheme. Wagons inducted by investors prior to the commencement of this scheme shall not under
any circumstances, be covered under this scheme.

4.0 ELIGIBILITY

Under this scheme the following shall be eligible to procure wagons.T
(i) Producers or consumers of the goods to be transported by rail.
(ii) PSUs, Central Public Sector Enterprises.
(iii) Logistics providers.
(iv) Port Owners/Port Rail Companies.
(v) Mine Owners.
(vi) Wagon Leasing Company (WLC) (for use of end users).

5.0 PROCUREMENT OF WAGONS

Procurement of wagons will be allowed only with prior administrative approval of Ministry of Railways (MOR). Procedure for procurement of wagons is given in detailed guidelines.

6.0 OPERATION OF PRIVATELY OWNED WAGONS

The rakes inducted under GPW Scheme shall not be merged in IR’s pool of wagons and will be distinctly indicated through a colour scheme. The rakes so inducted shall run on pre-approved circuits.

7.0 MAINTENANCE OF WAGONS

Maintenance of Wagons will be undertaken by IR on payment as per agreement to be executed with the wagon owner.

8.0 FREIGHT RATES AND CONCESSIONS

A rebate of 10% shall be given on the base freight on each loaded wagon. Such rebate shall, however, be ordinarily for a period of 15 years subject to a cap to the extent of the lease charges payable by IR to IRFC for procurement of rolling stock. The details in this regard are given in chapter IV of the Guidelines annexed.

9.0 PERIOD OF AGREEMENT

The period of agreement for each rake will be for the codal life of the specific stock as specified at the time of induction of the rake by the Ministry of Railways.

10.0 LIEN
In cases of default of payment by the investor, IR shall exercise lien on the privately owned wagons and the consignment loaded in such wagons to recover its dues.

11.0 FORCE MAJEURE

Railway shall not be responsible for any loss, destruction, damage, deterioration or non delivery of goods arising from the following causes:
i. Act of God.
ii. Act of war
iii. Act of public enemies
iv. Restraint or seizure under legal process
v. Orders or restrictions by Central Government or states Government or by any officer or authority subordinate to the Central Government or a State Government authorized in this behalf.
vi. Fire, explosion or any unforeseen risk.
vii. Act or omission or negligence of the investor or consignor or consignee
viii. Natural deterioration or wastage in bulk, or weight due to inherent defect, quality or vice of the goods.
ix. latent defect

12.0 DISPUTE RESOLUTION

All disputes in regard to implementation of the agreements with the Zonal Railway, under this scheme, will be resolved through Arbitration and Conciliation Act 1996 as amended from time to time. The concerned Zonal Railways with whom the agreement has been signed will deal with litigations and court cases arising if any.

DETAILED GUIDELINES ON IMPLEMENTATION OF GPWIS

INDEX

Chapter Subject Page
I Definitions and Abbreviations 6
II General conditions and procedure for procurement of General Purpose Wagons 9-7
III Conditions for Operation of General Purpose Wagons 13-10
IV Freight Concessions in GPWIS 14-15

Chapter – 1

DEFINITIONS AND ABBREVIATIONS

Definitions and abbreviations of some of the terms used in this document are as under.

1. End User: Refers to Customers, eligible to participate in the scheme as covered under Para 4.0 (i) to (vi) of the Policy, who have opted to move their goods by rakes procured by them directly or through WLC under this scheme and who are either consignor or consignee, who have paid and to whom the freight rebate shall be granted.

2. Empty Return Ratio (ERR): Ratio of the kilometers run by the wagon in empty condition to the total kilometers clocked by the wagon in the period under consideration.

3. General Purpose Wagons (GPW): Wagons which can carry multiple commodities without any specific approval from MOR for carriage of the commodity in that wagon like BOX, BOXN, BCN etc. however, special purpose wagons (specially designed to carry specific commodity or a group of commodities) will not be covered.

4. IR: Railway Administration.
“Railway Administration”, means the General Manager of a Zonal Railway;

5. MOR: Ministry of Railways, Government of India.

6. Wagon Leasing Company (WLC): A Leasing Company engaged in the business of procuring railway wagons and making them available to End Users.

7. Wagon Leasing Scheme (WLS): The Scheme introduced by MOR in the year 2008 for leasing of wagons and their operation on IR.

Chapter – II

General conditions and procedure for procurement of General Purpose Wagons

Following procedure and conditions are laid down for procurement of wagons by prospective investors under GPWIS:-

1. Application, along with specific details of the proposal, should be submitted to Executive Director/Freight Marketing (EDFM), Railway Board. The details should include number of rakes required, type of wagons, loading station(s), destination station(s), proposed specific route(s) or close circuit(s) and any other information relevant to the proposal. The proposal shall be examined in consultation with Traffic Transportation (TT) Directorate of Railway Board. If the proposal is found operationally feasible, an approval letter from Ministry of Railways permitting procurement of rakes under GPWIS on the approved circuit shall be issued for Principal Chief Operating Manager (PCOM) and Principal Chief Commercial Manager (PCCM) of concerned Zonal Railways.

2. On the basis of the approval of the Railway Board, an Agreement will be signed between the Principal Chief Commercial Manager (PCCM) of the concerned Zonal Railway and the applicant within 6 (six) months from the date of approval from Railway Board.

3. Wagons should be procured in units of full rake with 4% maintenance spares and one brake van. However, a minimum of one rake has to be invested in, to participate in the scheme. Rakes procured under any other investment scheme will not be eligible to be inducted under the GPWIS Scheme.

4. All Rakes under the scheme shall have to be in compliance with IRS designs and specifications applicable at the time of procurement and inspection by nominated agency of IR, namely, RDSO and extant government policies, rules and regulations

5. Party will be required to incorporate following warranty clause in the purchase contract with the wagon manufacturer.
“Supplies shall be guaranteed against any manufacturing defect/poor workmanship quality etc. for a period of 24 months from date of commissioning or 30 months from the date of delivery, whichever is later. During this period contractor will arrange to repair/replace any defective part free of cost or replace complete set if required. Further, since these wagons are to be utilized by the customers of Indian Railways, they are hereby authorized to invoke this warranty clause in case of any default on the part of wagon manufacturer.”

6. Privately procured wagons will be inducted into service only after completion of the mandatory safety and quality inspections by authorized agencies as notified by MOR.

7. Information regarding placement of order for procurement of rakes may be advised by the party (signatory to the agreement) to the PCOM of the concerned Zonal Railway as well as EDFM, Railway Board.

8. Date of actual induction of the rake on Indian Railways network will be informed by the party (signatory to the agreement) to the PCOM and EDFM, Railway Board. The Zonal Railway will keep the details of the wagons and brake-vans procured for each rake by the party (signatory to the agreement).

9. On receipt of documents about commissioning of the rake under General Purpose Wagon Investment Scheme (GPWIS), a commercial notification will be issued by the PCCM in consultation with PCOM. The notification should have all relevant details mentioning, inter alia, the details of the concession, the date of commencement of the agreement, the name of the owner, wagon numbers, commodity, approved circuits, etc.

10. The General Purpose Wagons (GPW) inducted under this scheme will not be merged in general pool of the Indian Railways. It will have associated loading and unloading point(s) over specific route(s) or close circuit(s) as approved by the Railways and will be allowed to load any commodity in the approved circuit.

11. Terminal for loading/unloading
a. The rakes procured under GPWIS will operate between private sidings/ terminals or Private Freight Terminals (PFTs) or Inland Container Depots (ICDs) or Ports or Mines equipped to handle the traffic for which GPWIS end users must have a tie-up with such private sidings/terminals, PFTs, ICDs, Ports, Mines or own its private terminals/sidings for handling of such wagons.
b. The wagons can also be operated from railway goods sheds notified in terms of Wharfage Rules, wherever feasible, on the recommendation of PCCM and approval of PCOM provided such rake handling will not in any way hinder or restrict or hamper any priority in handling of inward or outward traffic of other rail customer at present and as far as possible, even in the foreseeable future. Operation in the goods shed will only be allowed after due clearance for handling such General Purpose Wagon traffic. Rakes will be allowed only on placement of indent as per their requirement.
c. Under no circumstance GPW rakes will be allowed to be stabled on Railway Land. The same have to be stabled in private siding/terminal of the customer when not in use.
d. The associated loading and unloading point or points can be changed as per the requirement of the GPWIS end user. This change is subject to the operational feasibility and approval of the Railway Board.

12. Rake(s) should be procured and presented for induction under this scheme within 18 (eighteen) months from the date of signing of the Agreement. Fresh NOC has to be obtained for the circuit on expiry of this time limit.

13. Indian Railways reserves the right to modify/amend any provisions of the scheme in consultation with the existing end users of the scheme.

14. In cases of default of payment by the end user, IR shall exercise lien on the privately owned wagons and the consignment loaded in such wagons to recover its dues.

15. The ownership of the rakes under the scheme will be with the party who has procured the rake(s). The rakes will be allowed to operate till the codal life of the rake or till they are in a condition safe to operate whichever is earlier.

16. Obligations in case of accidents:

16.1 In the event of wagons owned by party under this scheme getting condemned as a result of accident where the responsibility is conclusively established that the accident occurred owing to the acts of omission and commission on the part of owner of the wagons the owner will be entirely responsible for all damage or loss of property which was owned by the railway administration and shall make good on demand all loss of or damage to such railway property. The loss to the wagons would be borne by the owner and the rake and line will be cleared by the owner at his cost or he shall pay the Railways to clear the same. However, the rake will continue to run only if certified fit by the agency competent to do so. This has to be done for the entire rake length failing which the rake will not be retained in service.

16.2 In the event of the private wagons getting condemned as a result of accident
where the responsibility is conclusively established that the accident occurred owing to the acts of Railways, the IR will pay the owner the depreciated value as per Income Tax Rules minus scrap value of the wagons at the time of condemnation. Condemned wagons can be disposed off by the party directly or through Railways. However, the rake will continue to run only if certified fit by the agency competent to do so. This has to be done for the entire rake length failing which the rake will not be retained in service.

Chapter-III

Conditions for operation of General Purpose Wagons in GPWIS

IR will operate GPW as per the conditions prescribed below:-

1. Wagons falling in this category shall not be merged in the wagon pool of IR. Rakes comprising such wagons will be identified as exclusively belonging to the party who had procured them. These wagons will have distinctive colour scheme to identify these rakes.

2. Loading in wagons procured under this Scheme will be permitted only against indents registered by end users subject to extant rules for allotment of wagons.

3. Indents for loading in such wagons will be placed at the approved loading point for the approved destination point for movement over specific route(s) or closed circuit(s) as approved by the Railways.

4. If the End User does not place any indents, these wagons will remain idle in his premises.

5. The rakes procured under the scheme will not be utilized by any entity other than the one with whom the agreement has been executed. However, this condition shall not apply in case where the rakes are loaded by Indian Railways in the return direction.

6. The GPW will run on carrying capacity (CC) basis (7500 Kms Brake Power Certificate (BPC) Validity or as per the latest circular) and the maintenance depot shall be decided on the basis of the proposed circuits.

7. The circuit on which the rakes are proposed to be deployed by end user would be approved by Traffic Transportation Directorate, Railway Board.

8. Based on the commodity flows, various Zonal Railways would be clubbed into Groups for each type of rolling stock. The Empty Return Ratio (ERR) for the stock originating and terminating within such a group of the zones would be calculated and only those circuits will be approved where the ERR is at par or better (i.e. ERR is less) than the benchmark ERR for the said group of zones.
For example, ER, ECR, ECoR, SER and SECR may be clubbed as one group where private BOXN rakes can be permitted to run in circuits. The ERR of BOXN rakes originating and terminating for the previous year would be considered as the benchmark ERR for deciding whether the circuit is to be permitted or not.

9. In case of small lead circuits (lower than 100 Kms), the condition of ERR benchmark would not be applicable.

10. The circuits will not be revised for at least 6 months from the date of approval/ operation.

11. Stabling and Wharfage Charges

11.1 If IR has to stable these rakes in railway owned yards at the request of the End User or is required to do so on account of any operational reason attributable to the End user, stabling charges as notified by MOR will be payable as per Rates Master Circular Demurrage-Wharfage-Waiver/2016/0 issued vide letter No.TC- 1/2016/201/1 dated 19.05.2016 and its amendment/revision/extension from time to time.
If a GPWIS rake is detained in railway terminal (goods shed), beyond the permissible free time up to the time of release of the rake, detention charge shall be levied.
11.2 For using railway goods shed, Terminal Access Charges, Detention Charges and Ground Charges shall be levied as per the following
11.2.1 Terminal Access Charge
The GPWIS party dealing with their rakes at railway owned terminals will be required to pay Terminal Access Charge (TAC) at the rates as notified from time to time by Railway Board.

Charges mentioned above will be levied on per rake basis, irrespective of the actual rake composition or actual number of wagons on a train at the railway terminal.

Terminal Access Charge (TAC) will be collected at the time of preparation of RR. The methodology for levy of TAC is given below :

Type of rake handling at Railway goods shed Terminal Access Charge (TAC)
Loaded rake in and empty rakes out 1 xRate of TAC
Empty rake in and loaded rake out 1 x Rate of TAC
Loaded rake in and loaded rake out 1.5 x Rate of TAC

Note : Rate of Terminal Access Charge will be as per Rates Master Circular/CRT- CCR-Hub&Spoke/2015/0 dated 07.04.2015 and its amendment/corrigendum issued from time to time.

11.2.2 Permissible Free time and Detention Charge for use of Railway goods sheds

11.2.2.1 Total Permissible Free time at Railway goods sheds on an GPWIS train will be as per type of stock i.e. flat wagons, covered wagons, box wagons or tank wagons as specified, irrespective of the activity or activities done on the rake and number of operations performed according to para 2.2 of Rates Master Circular/Demurrage-Wharfage-Waiver/2016/0 dt. 19.05.2016 and amendments issued time to time.

11.2.2.2 Free time will commence from the time of placement of the first wagon of the GPWIS train.

11.2.2.3 A GPWIS train will be considered to be released at the time at which the last wagon of the rake is released i.e. at the time at which the rake has been released in its entirely and is available for removal from the placement line(s).

11.2.2.4 Detention Charge will be levied for occupation of railway goods sheds beyond the permissible free time up to the time of release of the rake.

11.2.2.5 Detention charge would be levied at the prevailing rate of Demurrage Charge on per wagon per hour or part thereof for full rake.

11.2.2.6 PCCM/PCOM (whoever is designated for dealing with demurrage) of a Zonal Railways may notify a higher Detention Charge (up to six times the normal rate). Higher Detention Charge will be applied for those GPW rakes which take excessive time to release their rakes or do so repeatedly

11.2.3 Ground Usage Charge

11.2.3.1 Ground Usage Charge will be levied for the use of ground at Railway goods sheds.

11.2.3.2 GPWIS end User will be permitted a free time for use of ground at the railway goods sheds.

11.2.3.3 Permissible free time for use of ground for dealing with a GPWIS train will be same as is permitted under Wharfage rule for goods traffic, irrespective of the activity or activities done on the rake and number of operations performed, which at present is as under:

Type of goods shed Free time (in hours)
Group-I 12
Group-II 15
Group-Ill 30

11.2.3.4 Free time for the purpose of Ground Usage Charge will commence from the expiry of the free time for loading and/or unloading the traffic. Ground Usage Charge will be levied after expiry of the Permitted Free time till the time all goods are removed from the ground by the GPWIS operators and ground becomes available to be allotted to the next train.

11.2.3.5 However, if advance stacking has been availed by the GPWIS operator, Ground Usage Time will commence from the time advance stacking has been permitted to the time all goods are removed and ground made free for use by the next train. Ground Usage will be levied after making allowance for permissible free times for advance stacking and for ground usage.

11.2.3.6 Ground Usage Charge will be levied on per train per hour basis irrespective of the number of goods on the ground.

11.2.3.7 Ground Usage Charge will be levied for full rake at the prevailing rate of Wharfage charge, as under and its amendment/corrigendum from time to time:

Type of goods shed Present rate of Wharfage charge (per wagon per hour or part thereof)
Group-I Rs.150/-
Group-II Rs.120/-
Group-Ill Rs.75/-

11.2.3.8 PCCM of a Zonal Railway may apply higher Ground Usage Charge (up to six times the normal rate applicable for the 6th Day). Higher Ground Usage Charges will be applied for those GPW operators who repeatedly fail to release the ground at the goods sheds within two days.

11.2.4 Ground Usage Charge for advance stacking

11.2.4.1 GPWIS end user may be permitted advance stacking of goods on the ground of any goods sheds for 24 hours free of any charge for loading on an incoming train.

11.2.4.2 Ground Usage Charge at the rates mentioned in Para 11.2.3.7 will be levied in accordance with 11.2.3.5 if the ground is not cleared at expiry of the free time for advance stacking. However, no ground usage charge will be levied till the placement of the empty rake for loading even after lapse of the advance stacking period. The empty rake will be supplied only after expiry of the permitted time for advance stacking or completion of stacking, whichever is earlier.

11.2.5 Waiver of Detention Charge and Ground Usage Charge
Detention Charge and Ground Usage Charge will be treated on par with Demurrage Charge and Wharfage Charge for the purpose of consideration of waiver etc. under justified circumstances as per extant instructions as applicable to waiver of Demurrage/Wharfage charge.

12. If the rake is not loaded in the return direction, Railways may load the same if traffic is available and Railway owned rake is not available for loading on date. This loading will only be permitted consequent to the loaded movement of the GPWIS rake by the end user.

13. Freight traffic transported in the GPW in an approved circuit will originate from private sidings/ terminals or PFT or ICD or Ports or Mine capable of handling the traffic in such general purpose wagons.

However, Railway goods shed can also be used for loading/unloading provided found feasible as per the conditions mentioned in Para 11 (b) of Chapter-II.

Chapter – IV

Freight Concessions in GPWIS

Freight concession on base freight shall be provided to the End User for loading in the rakes consisting of general purpose wagons procured under GPWIS subject to following- conditions

1. GPW operating in approved Closed circuits

1.1 Freight rebate/credit of 10% will be granted whenever the rakes move in loaded condition.

1.1.1 When the end user pays the freight either as Consignor or Consignee the rebate shall be granted on the RR itself.

1.1.2 When the freight is paid by either Consignor or Consignee who is not party to the Agreement under GPWIS with the Indian Railways, then the rebate (including when Indian Railways uses these wagons as per Para 12 of chapter III), for the movement of goods shall accrue to the account of the party to the Agreement. The payment of such amounts shall be made to the party directly based upon a quarterly reconciliation by the concerned Zonal Railway with whom the agreement has been signed.

1.2 The above mentioned freight rebate of 10% will be granted in each case on the Base Freight Rate prevailing at the time of booking.

1.3 The amount of rebate on freight will be capped to the extent of lease charges payable by IR to IRFC, both on annual as well as cumulative basis for an equivalent amount of capital raised by it for financing rolling stock for IR. For such purpose, the cost of debt shall be the average cost of debt for funds raised by IRFC for financing rolling stock. The reference period for the average cost of debt shall be the quarter of the year (April-June, July-September, October-December, January-March) just prior to the date of the purchase order provided by the private party. IRFC is currently paid a margin over and above the average cost of debt. Similar margin shall be payable to the End- User over and above the average cost of debt. The margin is subject to change from time to time and is currently paid at 50 basis points over and above the average cost of debt.

1.4 Freight rebate of 10% on such loaded wagons will be granted ordinarily for a period of fifteen (15) years. Such freight rebate shall not exceed the lease charges payable by IR to IRFC for procurement of such wagons during the first fifteen (15) years of the lease agreement between IR and IRFC for leasing of rolling stock. In case, the investment is recovered in a period less than fifteen (15) years stipulated above, the freight rebate shall cease from the exact date of full recovery. However, if the investor is unable to recover his original investment then the period of rebate shall be extended till the recovery of capital cost of investment.

1.5 Capital cost will be reckoned w.r.t. the Purchase Order of the rakes given by the party subject to a maximum of cost of last procurement of such wagons by the Indian Railways as certified by the concerned Directorate of the Railway Board.

1.6 CRIS will prepare a module incorporating the above elements of accountal by tagging these wagons under GPWIS scheme such that an automatic chart of rebate granted with capping of maximum rebate to be granted in a year and total rebate to be granted on the rake will be incorporated.

1.7 Freight rebate (given against recovery of only the cost of investment) will be given concurrently to any other freight incentive granting scheme applicable for the loading done in the rake. On recovery of investment by the End User loading in these rakes shall be eligible for other freight incentive schemes in vogue at that point in time.

1.8 No freight will be charged for movement of empty rakes to the next destination provided the distance travelled by empty rake is less or equal to the distance travelled by the train before unloading. However, if the empty rake travels an additional distance over and above the loaded distance, empty freight rate shall be charged at 50% of loaded freight of public tariff on carrying capacity of the wagons.

2. Loading in return direction by IR

2.1 If the rake is not loaded in the return direction Railways may load the same if traffic is available and Railway owned rake is not available for loading on date. This loading will only be permitted consequent to the loaded movement of the GPWIS rake by the end user.

2.2 An amount equivalent to the freight rebate as applicable under this Scheme shall be determined at the time of preparation of RR and credited to the end and the same shall be reckoned for the purpose of calculating the quantum of rebate granted under the Scheme

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