Private players in Railway Container traffic field

New Delhi, Jan 4: The booming containerised railway traffic was today formally thrown open to private players with the Railway Ministry signing concession agreements with private operators, signalling the end of the monopoly status of the state-owned Container Corporation of India (CONCOR).

Incidentally, CONCOR was among the 14 operators which signed the agreement at Rail Bhavan in the presence of Railway Minister Lalu Prasad, Finance Minister P Chidambaram and Planning Commission Deputy Chairman Montek Singh Ahluwalia.

Describing the event as a ''historic initiative in the Public Private Partnership'' and a 'leap forward'' in the history of container traffic of the Railways, Mr Prasad said it would signal a new beginning in freight operations.

''We have hammered out an agreement on the basis of which the Railways and licence holders will script a grand success story. It wil prove to be 'a winning proposition' for the Railways, a 'double win' for license holders and a 'triple win' for consumers,'' the minister said.

Mr Prasad assured that the agreement had been formed in a manner that would enable the private operators to raise loans from banks.

He also expressed happiness over the fact that the 14 operators would be investing Rs 400 crore in the manufacturing of wagons required for runing of container trains. ''I am confident that in the next few years we will be able to attract investment worth hundreds of crores of rupees in the construction of wagon and container terminals.'' The Railways had already collected Rs 540 crore from the 14 operators as licence fees. In addition, the Railways will collect haulage charges from them every year at rate fixed by it.

On January 5 last year, Railway Minister Lalu Prasad had thrown open railway container business to private players, allowing companies and individuals to run container trains for both import-export and domestic operations in a competitive environment.

Besides CONCOR, the 13 private companies, which signed today's agreement, are: the Anil Ambani-owned Reliance Infrastructure Engineering, Mumbai; Adani Logistics; Box Tran Logistics; Delhi-Assam Roadways Corporation Ltd; Central Warehousing Corporation; Gateway Distri Parks Ltd; Ken Terminals; Container Rail Road Services Ltd; India Infrastructure&Leasing Private Ltd, Mumbai; Innovative B to B; Pipavav Railway Corporation LTD; and SICAL Logistics, Chennai.

Pointing out that the Railways earned two-thirds of its income from freight operations, Mr Prasad said 90 per cent of it was limited to transportation of merely 8-10 goods and products. ''The privatisation of containerised railway trade will make it possible to significantly expand the number of goods significantly,'' he hoped.

With regard to the the demand from the private operators about a guarantee about the transit time of freight trains, the minister said it was not immediately possible because of the saturation of the existing rail network.

''However, once the dedicated freight corridor is completed, we can bring out a time table for freight trains as in the case of passenger trains,'' he assured.

The privatisation move carries the promise of a four-fold increase in traffic -- from 55 million tonnes to 110 million tonnes in the next five years -- or an additional Rs 12,000 crore in revenues for the sector over the next three years.

Under the agreement, operators have been given licence to run trains for a period of 20 years, extendable by another 10 years, subject to their satisfactory performance.

For the containerised operations, the rail routes connected with the ports have been grouped in four categories.

With the exception of the Delhi-Mumbai route, applicants will have to pay a registration fee of Rs 10 crore while for the Delhi-Mumbai route, the amount has been fixed at Rs 50 crore.

The operator will charge his customers for rail haulage, terminal handling and ground rent on a market-determined basis, and the Railways will have no control over such pricing.

Under the scheme, private players will have to procure their own rolling stocks required for the movement of container trains and have a suitable access to a rail-linked Inland Container Depot (ICD) or construct their own ICD in three years.

Further, they will have to pay to the Railways haulage charges every year applicable uniformly to all operators.

Haulage charges are imposed by the Railways on container operators to allowing them to use its track and signalling infrastructure.

There is no restriction on the number of trains a private player can operate.

UNI