The Hindu Business Line : No guarantee on limiting haulage charge increase

Demand ignored
The Railways can change the haulage charges as many times as it deems fit in a year.
Container operators had demanded that hike should be made only once a year.
The operators also wanted the hike to be announced in the Rail Budget.

SIGNING PACT: The Minister for Railways, Mr Lalu Prasad, flanked by the Finance Minister, Mr P. Chidambaram, and the Deputy Chairman, Planning Commission, Mr Montek Singh Ahluwalia, during the signing of the concession agreement between Indian Railways and container train operators in the Capital on Thursday. — Ramesh Sharma

New Delhi , Jan. 4

The Indian Railways has not accepted the major demand of container operators to restrict changes in haulage charges to once per annum.

In the concession agreement that was signed between the Railways and 14 licensees here on Thursday, the clause relating to changes in haulage charges assures the firms that "haulage charges shall not ordinarily be revised more than twice a year".

This implies that the Railways can change the haulage charges as many times as it deems fit in a year.

The Railways collects haulage charges for letting operators use its infrastructure, such as tracks and signalling system. Thus, haulage charges are a cost element for the operators.

One of the major demands of the container operators was that the Railways should hike the haulage charges only once a year and that hike should be announced in the Rail Budget. Even after several rounds of negotiations, the Railways has not given in to this demand.

Fine Print

The Railways on Thursday signed the concession agreement with 14 companies almost a year after they paid a total of Rs 540 crore as registration fee for offering containerised services on rail.

This agreement, which specifies rights and responsibilities of the Railways and the operators, would help the licence-holders tie up their finances. A majority of the operators are yet to tie up the finances, as the lenders wanted the concession agreement to be firmed up.

While the document has addressed some concerns of the operators, other problems have been left unattended. The Railways has taken off the prohibition it had recently imposed on movement of coal, coke, minerals and ores in containers. However, it has put in a provision as per which the Railways can charge "special rates" for hauling specific commodities.

Service guarantee

The Railways has provided service guarantees to operators. It has assured that it would provide a locomotive within four hours of a written demand being placed from any operator to haul its container wagons.

But, if it is unable to provide an engine within 12 hours of a demand being placed, then it would provide a rebate of two per cent of haulage charges to the operator for the booked route. It has also said that it would provide wagon maintenance service within six hours. The Railways has said that it would allow for electronic transfer of haulage charges from operators to it.

The operators have to pay the haulage charge when the booking receipt is issued from the Railways.

In case the operator delays payment, he would have to pay extra surcharge. If within seven working days, the operator does not pay, then the Railways can stop hauling the operator's traffic. And if the operator does not pay up even within 30 days, there is a provision that allows the Railways to take possession of the operator's wagons.

There are two clauses for ownership change — both are subject to the companies meeting India's security concerns and the Railways' stipulated conditions for licence holders. The lenders can substitute the licence holding company even before it starts operations. But, there can be no change of control through transfer before the company completes one year of commercial operations.

IMPACT ON INDUSTRY

It is expected that with the induction of private operators in rail transport, there will be substantial increase in the share of rail-borne container traffic, which is limited to 22 per cent now. This is likely to result in increased growth of container traffic from the present 20 million tonnes (mt) to over 100 mt by the end of the XI Five Year Plan, said the Union Railway Minister, Mr Lalu Prasad. "I am happy that 14 operators are investing about Rs 400 crore for operation of around 2,000 containers," he added.

Concor, the company that enjoyed monopoly for running containers till the Railways opened up the sector, closed at Rs 2,122.05 on the BSE on Thursday, down 0.37 per cent from Wednesday's close of Rs 2129.95.

The fourteen operators are Adani Logistics Ltd/Mundra Port & Economic Zone Ltd; Boxtrans Logistics India Services; Container Corporation of India (Concor); Central Warehousing Corporation; Container Rail Road Services; Delhi Assam Roadways Corporation Ltd; Emirates Trading Agency; Gateway Rail Freight Pvt Ltd; Hind Terminals; India Infrastructure & Leasing; Innovative B2B Logistics Solutions; Pipavav Railway Corporation; Reliance Infrastructure Engineering; and SICAL Logistics.

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