The Hindu Business Line : Railways opens up container operations — Concor monopoly ends; Pipavav Rly Corpn, Kutch Rail may benefit

The Railway Minister, Mr Lalu Prasad, and the Chairman, Railway Board, Mr J.P. Batra, at a news conference in the Capital on Thursday. — Ramesh Sharma

New Delhi , Jan. 5

THE Indian Railways today opened up its containerised operations to other private and public sector players breaking the monopoly enjoyed by Container Corporation of India.

Interested companies can take route-specific or all-India permission by making a one-time payment of Rs 10-50 crore.

Operating permission would be granted for 20 years, which can be further extended by another 10 years to transport export-import (EXIM) and domestic traffic.

While the registration fee has been kept relatively low, the earnings for the Railways would be through haulage charges that the parties would have to pay on a per-container basis.

For example, for each container on the Delhi-Mumbai route, operators would have to pay Rs 12,000 as per current haulage charges, which can be reviewed by the Railways from time to time.

As per the policy, applicants need to have a net worth or annual turnover of Rs 100 crore. They will have to make their own arrangements for a rail-linked inland container depot (ICD) by leasing it from ICD owners or by owning it. They also have to procure flat wagons for transporting containers, whereas Railways would provide locomotives.

"The applicant should either have a rail-linked ICD or within a period of six months of applying, he should give an assurance that he will construct his own rail-linked ICD (in three years) or he will arrange to furnish a lease agreement with an existing rail-linked ICD owner," the Railway Minister, Mr Lalu Prasad,said.

There is no cap on the number of players who would be allowed to operate in each route.

Players can run as many trains as they wish though rakes would be despatched on a first-come-first-served basis.

Announcing the policy here today, Mr Prasad said containerised export-import traffic in India was growing at a rate of 15-20 per cent a year and is expected to touch 110 million tonnes (mt) over the next five years from the current 55 mt.

There are possibilities of significant development in the domestic container traffic also, he said.

At present, Railways has a one-third share in the local domestic traffic of about 2,000 mt. Several Railway SPVs such as Pipavav Railway Corporation Ltd (PRCL) and Kutch Rail Company Ltd (KRCL) are expected to benefit from this move.

Players such as Reliance Industries, Central Warehousing Corporation, JM Baxi group, Adani Logistics, Maersk India, P&O Ports, APL Logistics are also understood to be interested in the sector.

The rail routes have been grouped in four categories. Players wanting to operate between JNPT/Mumbai port and national capital region (NCR) have to shell out Rs 50 crore. However, these players would also get to operate on all other routes.

Railways has defined three other categories of routes and operating in each of these categories would cost Rs 10 crore. The categories are JNPT/Mumbai ports with hinterland except for NCR; ports of Pipavav, Mundra, Chennai/Ennore, Vizag and Kochi with hinterland; and ports of Kandla, New Mangalore, Tuticorin, Haldia/Kolkata, Paradip and Mormugao with their hinterland.

As for the process of applying, Railways would invite applications for one month every year. Applicants will have to pay the registration fee while applying.

The registration fee of those applicants who are not eligible will be refunded. The permission would be for a 20-year period and can be extended by another 10 years subject to satisfactory functioning by the operator.

Players can exit operations by transferring the permission to another eligible operator, with Railways approval.

Players are free to decide the level of tariff for charging their customers for rail haulage, terminal handling and ground rent.

They can also have read-only-access to Railways' freight operating information system by paying some nominal charge.