Bidding may be done on the basis of traffic assured by operators

Mamuni Das

New Delhi, July 12

The Railways is considering a proposal to allow private players manage rail-side warehouses based on the traffic that they assure to theRailways. To start with, the Railways plans to put up details of all available land, where warehouses can be set up, on the Web site, Ministry officials said.

The Railways was earlier working on a proposal 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 to set up and operate such warehouses.

Competitive bidding

"We feel that competitive bidding can be done on the basis of the number of rakes that the warehouse operator assures," said an official adding that they may set a minimum number of assured rakes that we want and let players bid over and above that. This would ensure that Railways gives the bid to such a player who assures it of maximum possible traffic to and from a particular warehouse. " The higher the traffic assured, the higher would be our earnings," he explained.

Of course, a certain minimum criteria would be set to ensure that only serious players, with prior experience, get to manage the warehouses.

Moreover, the Railways is also considering various methods to get a share of revenues that may accrue due to non-rail related activities in the warehouse complex.

"Operators could also earn revenues from non-rail activities such as setting up an ATM, other kiosks offering different facilities like phone, etc. We are trying to work out ways to build on that revenue as well," said the official.

These warehouses are expected to reduce the overall logistics costs by enabling customers to cater to their distribution network from the warehouse itself.

"We are considering various options as of now and are yet to finalise the policy details," a senior official said.

(This article was published in the Business Line print edition dated July 13, 2006)
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