The Hindu Business Line : Rlys to let pvt players set up rail-side warehouses

Opening up
Railways working on a policy to finalise the details.
Investors hope to earn revenues; Railways hopes to get more freight traffic.
CWC proposes to set up 28 more warehouses.

New Delhi , March 15

Indian Railways plans to let private players set up and operate rail-side warehousing complexes on a revenue-sharing basis.

Currently it allows only the Central Warehousing Corporation (CWC), the Food and Consumer Affairs Ministry PSU, to set up and operate such warehouses.

These warehouses reduce the overall logistic costs by enabling customers to cater to their distribution network from the warehouse itself. "We are working on a policy to finalise the details," said a senior official in the Railway Ministry.

The policy is expected to be ready within a month, he added.

Warehouse operators may be asked to shell out land lease charges (provided the warehouse is being set up on rail land, which is likely to be the case) apart from a certain level of revenue share.

"We would like this partnership to be a win-win deal for both Railways and the private/public investors, as they can earn revenues and Railways gets more freight traffic," he said, declining to divulge further details.

"Till date we had allowed only CWC through a strategic partnership to set up warehouses on rail land. We would soon be allowing other private players as well," he said.

Strategic tie-up with CWC

Railways already has a strategic partnership with CWC for setting up 22 integrated rail-side warehouses, driven by the success of the warehouse at Whitefield, Bangalore.

Besides, CWC has also sent a proposal for setting up 28 rail-side warehouses, said a senior CWC official.

These 22 locations include Badnera (near Amrawati) and Nasik Road. Moreover, construction is also on for such warehouses at Sanathnagar (Hyderabad), Nishatpur (Bhopal), Shakur Basti (Delhi), Alamnagar (Lucknow), Roza (Shajanpur, UP) and Ghaziabad. CWC has put in an average investment of Rs 10 crore in each of these warehouses, with capacity of about 14,000 tonnes.

Those under construction are expected to be in place by September-October 2006, whereas the phase-II expansion plans at Bangalore is expected to be operational by April 2006.