'Concor has an unfair edge'

An independent regulator is required to ensure fair competition in the container transport business in the wake of the Railways opening the sector to private players, feel industry experts and chiefs of various regulatory bodies.

This is because the Railways' own subsidiary, the Container Corporation of India (Concor), is a major player in this area. Indian Railways hold nearly 63 per cent equity in Concor. Railways Minister Lalu Prasad yesterday assured that a level-playing field will be created between the government and the private firms.

"Even though the Railways are claiming that rakes will be allocated on a first-come-first-served basis, how can one ensure that Concor will not get a priority," said S L Rao, former chairman of the Central Electricity Regulatory Commission (CERC).

He added that the tracks were owned by the Railways and that private players had no alternative but to operate on them and pay the haulage charges.

Even though Railways claimed uniform haulage charges for all players, this claim should be justifiable, he said.

"Private players should have an independent forum where their grievances are heard and redressed," he said. The Railways' opposition to having an independent tariff regulator is against the basic rule of fair competition, he added.

Telecom Regulatory Authority of India (Trai) Chairman Pradip Baijal also agreed with the opinion. "A regulator will ensure that competition is fair as illustrated by the telecom sector, which grew 2 per cent in the first 50 years and has been growing at 5 per cent every year since then."

A conflict of interest was certain if a company in fray for a chunk of business was owned by the regulator of that business itself.

A K Basu, chairman, Central Electricity Regulatory Authority, said the presence of public sector companies like the NTPC and Power Finance Corporation prompted the establishment of the CERC.

"Of course, the natural gas sector does not have an independent regulator," he added.

Admitting that the petroleum ministry was considering setting up a natural gas regulator, he said one should also let the Railways examine the situation for some years before setting up an independent body to oversee its functions.

To make matters worse, Concor already had an advantage in terms of owning container depots at the prime locations on the railway land, railway staff being deputed to Concor and a huge infrastructure base built over years, many industry experts said.