The Hindu Business Line : Numbers in box operations business

New Delhi March 30 It takes about Rs 300 crore to start the basic container train operations at the current real estate prices. This includes setting up one inland container depot unit (ICD) with one lakh standard sized container handling capacity (20-feet equivalent unit or TEU), wagons for 15 rakes to offer daily service, operating costs and handling equipment charges, according to Pipavav Rail Corporation Ltd (PRCL).

Pipavav Rail, which is partially owned by the Ministry of Railways, has a container train operating licence to offer services between the western ports (except Mumbai) and hinterland.

"With land prices hovering around Rs 50 lakh per acre, we need the Government's help to acquire land to ensure feasible business," said the PRCL Managing Director, Mr R.C. Dubey. Given current level of land prices, it would be difficult to be profitable in train container operations if each operator was to set up an ICD, he said.

For a debt of Rs 300 crore, the debt servicing cost alone works out to about Rs 42 crore per annum at the present interest rates, he said.

And with a terminal handling cost of about Rs 5 crore per annum, the total costs are at Rs 47 crore.

REVENUES

On the revenue side, even if an operator was to do very well and move one lakh TEUs every year, (about one-fourth of what Concor does between Delhi ICD and Mumbai), the revenues (given Concor's current tariff levels) would be Rs 40 crore at the most per annum, he said.

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