Pvt operators say there’s no level ground with Concor; rlys says they’re doing a rational thing.
There is a clash of interests between Indian Railways and private container train operators (CTOs). Indian Railways (IR) says the CTOs eat its traffic and the latter say the haulage charges and other operating conditions are being stacked against them.
Private container train operations was IR’s first public-private partnership. With the implementation of the Private Freight Terminal Policy in 2010, the railways had opened a number of underutilised rail sidings across the country for the CTOs. Still, many of the 14 container operators are bleeding and industry insiders say some would like to exit the business. "Any exit might be detrimental to the overall PPP initiative of IR, so they should resolve this issue amicably," said one.
| POINT COUNTERPOINT | |
| What private container train operators say | What railways say |
| High operational costs of CTOs | Concor and other CTOs are treated similarly |
| Shift of railways from flat haulage rates to differential rate, based on commodities | CTOs primarily invited to aggregate piecemeal traffic are eating into bulk traffic of the railways |
| No time table for freight trains | Fixed time tables can be brought after DFCs |
| Inadequate infrastructure, land acquisition problems. | Status quo on land lease after FinMin’s notification, Concor advantage historical |
| Rake maintenance by the railways takes time | Rake maintenance is to ensure security |
Of 16 licences given out by IR since 2006, Reliance and Pipavav Rail Corporation Ltd have not started operations. The Railways move around 35 million tonnes of container traffic yearly, of which 70 per cent is moved by its own undertaking, Container Corporation of India (Concor). The rest is done by container train operators (CTOs).
According to a senior rail official, there was an unwritten understanding that CTOs would aggregate only piecemeal container traffic, not eat away from the bulk traffic of IR. “As freight traffic cross-subsidises passenger traffic, losing the bulk traffic would be detrimental for the railways and the nation,” he said.
CTOs say IR has a rake-to-rake concept of carrying freight traffic, rather than piecemeal indents. “As a result, there is a lot of untapped market for piecemeal indents of the bulk traffic. The private operators were primarily aggregating these and charging at competitive rates," said an executive representing one of the players. Some may be nibbling at IR’s bulk traffic, he said, but the latter’s differential haulage rates has squeezed their margins, he said.
More From This Section
The concession agreements signed between IR and CTOs did not exclude any commodity. IR says there is no violation of contract conditions in charging private operators differential rates, based on commodities. The railways are charging CTOs a higher haulage for moving bulk commodities, compared to other containerised cargo. CTOs have to pay haulage charges to IR for using facilities such as track, locomotive and signalling systems. This makes CTOs largely dependent on IR.
A senior Concor executive said, “After the entry of private players, Concor has 70 per cent of the business volume and it is expected to increase after the commissioning of Dedicated Freight Corridors (DFCs).”
According to CTOs, the level playing-field IR talks about is absent on the ground, since Concor has an established infrastructure of 61 terminals, with rail facilities in the vicinity.
The private players also feel Concor is charging them a prohibitively high price for access to terminals built on railway land. Operators face problems in land acquisition for construction of infrastructure. They want land at the same subsidised cost as was given to Concor but IR cannot move on this proposal, since the finance ministry has put on hold the leasing or selling of railway land, said IR official.
The private operators' demand for a fixed transit time has also not been met. IR says it will be in a position to consider guaranteed transit time and a fixed time table only on the DFCs. CTOs also feel IR has an overlap of professional interests, of being the interpreter, policy maker and the implementing body. It has 63 per cent stake in Concor and key IR professionals come there on deputation.