State-run Container Corporation of India Ltd (CONCOR) has shut 15 under-performing inland cargo terminals and returned the land on which they were operating to the Indian Railways.
India’s biggest rail hauler of containers has also started merging regions as it looks to keep itself financially fit on the road to privatisation.
The closure of the terminal at Sabarmati is the only surprise in the list of 15 facilities that have been shuttered. The Sabarmati terminal had a turnover of Rs 51.40 crore in FY19, the highest among the 15 facilities.
The land on which the Sabarmati terminal was operating has been handed back on demand to the Indian Railways in order to use it for the development of the National High-Speed Rail Corridor or the Mumbai-Ahmedabad bullet train project. The traffic handled at Sabarmati terminal will be shifted to the nearby MMLP at Khodiyar.
Merging regions
Simultaneously, CONCOR has merged its Western and Central regions. Some of the terminals under the Central region have gone to the Western region and some to the Eastern region, a government official said.
Likewise, the North Western region will also be merged with the Western region.
“The merger of regions is aimed at rationalisation of operations, better utilisation of human resource and also to cut down costs,” the official said adding that it would also be in preparation of the privatisation of the company.
The 84 terminals currently run by CONCOR is looked after by seven regions.
Terminals returned to Indian Railways
The terminals that were returned to the Indian Railways include five from the Western region (Chinchwad in Pune, Miraj, Ratlam, Nagpur and Bhusawal), three from the Northern region (Babarpur in Panipat, Rewari and Ballabhgarh), three from the South Central region (Desur in Belgaum, Raipur and Visakhapatnam CFCV), two from Eastern region (Tata Nagar in Jamshedpur and Rourkela) and one each from North Central region (Madhosingh in Mirzapur) and North Western region (Sabarmati), according to the official.
These 15 terminals, that were built on land leased from the Indian Railways at concessional rates, had a combined turn over of Rs 277.50 crores in FY19.
Apart from the above, CONCOR has also handed over the empty container parks at its Tughlakabad terminal – New Mineral Siding Okhla, Power Cabin and the New Power Cabin near Tughlakabad Railway Station – to the Indian Railways.
Of the 15 terminals, Rourkela, Tata Nagar, Chinchwad, Miraj, Bhusawal and Madhosingh have become unviable for operations.
The traffic hitherto handled at Rewari will be cleared from the Khatuwas rail head. The existing traffic at Babarpur will be diverted to CONCOR’s newly built multi-modal logistics park (MMLP) at Barhi in Haryana.
Similarly, the existing traffic of Visakhapatnam terminal will be shifted to the MMLP at Visakhapatnam and the existing cargo at Raipur will be shifted to the MMLP at Naya Raipur.
The cargo at Ratlam will be handled at the newly built MMLP at TIHI Indore while the traffic at Nagpur will be shifted to the newly constructed MMLP at MIHAN in Nagpur.
The Ballabhgarh business has been shifted to Tughlakabad (near Delhi), the flagship facility of CONCOR.
The land on which the Desur facility was built has been handed over following a demand from Indian Railways.
The government has decided to privatise CONCOR by selling 30.8 per cent of its 54.8 per cent stake in the company to a private company along with transfer of management control.
CONCOR’s plans
By returning the land at 15 locations, CONCOR seeks to reduce its financial burden as the government is finalising a plan directing the state-run firm to buy land owned by Indian Railways on which it has built close to half of its 84 terminals.
According to a rough calculation, the land purchase will cost CONCOR more than Rs 8,000 crore which will be funded mainly through debt.
Resolving the land issue is key to the planned privatisation of the Navratna PSU to avoid allegations of transferring Indian Railways land to a private entity at low rates.
CONCOR, according to the plan, will buy the Indian Railways land on which it runs the remaining facilities at 6 per cent of the circle rate - the rate at which the government recognises land value for a particular site, the official said.The land transaction will be in the form of a 99-year lease.
“When there is not much traffic at the 15 facilities, there is no point buying this land, paying 6 per cent of the circle rate and keeping it idle,” he added.