The Hindu Business Line : `Our target is 20 pc annual growth for next three years'

With a total of 55 inland container depots (ICDs) in operation, the Container Corporation of India (Concor), according to its Managing Director, Mr Rakesh Mehrotra, has covered almost the entire country. However, there are plans for setting up a few more ICDs. "The biggest challenge facing Concor is how to keep up with the growth of the economy", Mr Mehrotra told Business Line recently. He is concerned because the path to growth is not always smooth and easy. The capacity has to be augmented both in terms of rolling stock and terminals. More important, the Indian Railways too has to provide the necessary support. After all, Concor is a wholly-owned subsidiary of the Indian Railways.

Excerpts from the interview:

How has been your performance so far in the current fiscal?

Not too bad. In the first quarter we posted 16 per cent growth in international traffic, compared to 10 per cent in the whole of 2004-05. The international traffic accounts for nearly 80 per cent of our total throughput. Our domestic traffic growth, at 7.82 per cent during the period, too, has been higher than in 2004-05. In August alone, the growth of international traffic was 26 per cent and of domestic traffic 13 per cent and overall 24 per cent.

But the growth of traffic at major ports in the first quarter...

Yes, the growth of traffic in major ports in the first quarter was around 9.5 per cent or so while our growth was more than 16 per cent.

How this was possible?

Very simple. We've succeeded in stepping up our market share in international traffic and it is 30 per cent now. We would like to step it up further to 35 per cent this fiscal.

Could you please explain?

We have increased our capacity. Between April 2004 and May 2005, we added 1,800 high-speed flats to our fleet, bringing the total to 5,000. What we did by way acquisitions in these 14 months was not done in previous three years. In the current year we've placed orders for another 1,300 flats with three workshops at Trichy, Jamalpur and Hubli. These orders will be executed by the first half of the next fiscal. But it is not enough just to have more wagons; we must also have more terminals.

What are your plans for terminals?

As you perhaps know, we have gone for joint ventures and teamed up with Danish container major Maersk for the third terminal at Jawaharlal Nehru port and with the Dubai Port International for the Vallarpadam project in Kochi.

We are also looking into opportunities for participating in proposed container terminal at Ennore port as and when it comes up and in the second container terminal at Chennai port. We are in search of partners. Besides, we are also launching several new ICDs in various parts of the country.

Your parent organisation, the Indian Railways, too must help you fulfil your plans. Are you getting the kind of support you need from the Railways?

It would be wrong to presume that there is any conflict of interest between the Indian Railway and its wholly-owned subsidiary Concor. We both are providers of services. However, the Railways, being a more than 150-year old organisation, has a certain style of functioning which may not always come up to the present day requirements. Ours is a more customer-focused organisation.

How?

Our focus being on customers, we have launched modules for training our frontline staff who directly interact with the customers. We are investing heavily to upgrade the skills of our staff, so much so that 60 per cent of our total workforce of 1,000 is always undergoing continuing training programmes, of one kind or another. We have a dedicated page on our Web site inviting suggestions from our customers on how to improve our services.

There has been criticism of your performance in various ports, particularly JNPT...

In JNPT, we handle about 30-35 per cent of the throughput. In certain other ports, such as Mundra, our share is more than 60 per cent. Our performance at Vizag and Pipavav too is good.

During the recent Mumbai floods, when JNPT remained closed for two weeks, we pressed into operation 20 additional rakes to clear the backlog. We moved containers by barges from JNPT to Mumbai port, from where a rail link was available. We even moved boxes by road to Dronagiri terminal. The criticism may be due to reasons about which I would not like to comment.

What kind of growth are you targeting?

In 2005-06, we are targeting a throughput of 1.5 million TEUs of international traffic and 4.5 lakh TEUs of domestic traffic, envisaging 16-17 per cent growth. However, our internal target is higher. A 20 per cent annual growth over the next two to three years will put us in a comfortable position.

The Rail Budget for 2005-06 proposes to encourage private sector firms to undertake Concor-type operations. How do you react to this?

In a liberalised scenario, competition is inescapable. We are prepared to face competition. In terms of infrastructure, assets and human resources we will be ahead of others. We have nothing to fear.

You are now exploring opportunities in new areas such as cold chain ... .

Yes. Hopefully, if everything goes as planned, the first cold storage, which is being installed near Delhi as part of the proposed coal chain, should be operational by June/July next year. Once operational, it will cater to requirements of the fruit-growers in four States in the north — Uttar Pradesh, Uttaranchal, Himachal Pradesh and Jammu & Kashmir.

What about auto-carriers?

We plan to form a joint venture company to provide complete inbound and outbound logistics services to the automobile manufacturers and we have selected the joint venture partner already in similar business.

Once the JV has been formed, we will firm up the business plans and place orders for rolling stocks. Initially, we propose to operate in three circuits, namely, Delhi-Chennai, Chennai-Pune and Pune-Delhi and will start with seven to eight rakes.

Concor is also spreading its wings to neighbouring countries, isn't it?

Our participation in Himalayan Terminals Pvt Ltd, the joint venture company that runs the ICD at Birgunj, in Nepal, has been our first overseas venture. HTPL is yet to break even but we are confident of turning the corner. We are revamping our marketing strategy and have taken up with the appropriate authorities in Nepal for renegotiating our contract for payment of royalty.

We want to have a revenue-sharing arrangement in place of the present system of lump-sum payment.

What about your barge service to Bangladesh?

The first trial shipment of two containers to Narayangunge by barge has been completed. We look forward to more such shipments.

Right now the bulk of the trade between the two countries is by road. We believe that the exporters must be given a choice — they must be provided with an alternative mode of transportation as the dependence on single mode has its own pitfalls, as they must have realised it by now.

Some years ago Concor also tried its hand at shipping, didn't it?

Yes. A couple of years ago, we teamed up with a shipping company and did undertake two shipments, totalling 700 TEUs, to East Asia through the port of Chennai. Subsequently we abandoned it.

We propose to revive it again. We are in discussions with several shipping lines and others on how to go about it. We have become wiser from our experience, which was not too satisfactory. We do not want a repetition of the same.

Besides, if we offer a complete package, covering both inland transportation and shipping, perhaps we have to function as a multimodal transport operator and, in that case, we have to comply with several formalities.

We are examining the whole gamut of relevant issues.

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