Logistics

In a first, Concor starts coal movement for Karnataka power utility

P Manoj Mumbai | Updated on July 10, 2020 Published on July 10, 2020

State-run rail hauler Container Corporation of India Ltd (Concor) has started moving coal for Karnataka Power Corporation Ltd (KPCL) on a two-year contract, as it looks at diversification into newer revenue streams.

The contract involves moving 13.24 lakh tonnes of coal a year from Mahanadi Coalfields in Sambalpur, Odisha to KPCL’s Raichur thermal power station. Since June, Concor has already moved 22 coal rakes transporting about 3,500 tonnes of cargo on the contract, company officials said.

Concor is responsible for not only the movement of coal but also the quality and quantity assurances of cargo at both origin and destination points.

The navratna PSU is India’s biggest rail hauler of containers with a 78 per cent market share in the export-import movement of containers. KPCL is owned by the government of Karnataka. The power utility had earlier outsourced coal movement to a private entity but shifted to Concor, saving as much as 30 per cent on coal logistics, an official said.

Diversification strategy

Coal transportation is part of Concor’s diversification strategy into distribution logistics, coastal shipping and integrated logistics and manufacturing zones.

The firm entered the coastal shipping business last year with two hired ships, linking Deendayal Port Trust in Kandla with VO Chidambaranar Port Trust in Thoothukudi, Tamil Nadu, with stops at New Mangalore Port Trust and Cochin Port Trust by a weekly call.

Concor has also identified 20 locations for setting up distribution logistics centres — a vertical integration of its core business — to provide end-to-end logistics solutions. It plans to develop around 50 million sq ft of warehousing in four or five years at these distribution logistics centres which will be structured on a public-private-partnership model.

Privatisation plan

The government has decided to privatise Concor by selling 30.8 per cent of its 54.8 per cent stake in the rail hauler to a strategic buyer. The Department of Investment and Public Assets Management (DIPAM) has hired Deloitte Touche Tohmatsu India Ltd as the transaction advisor for the sale.

The asset sale ministry has also mandated L&L Partners as legal advisor and RBSA Valuation Advisors LLP as asset valuer for the privatisation of Concor.

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Published on July 10, 2020
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