With private container train operators (CTOs) failing to break into Concor monopoly on containerised cargo, the railways and CTOs are in a bit of clash. The private operators have started getting into railway piecemeal traffic of bulk commodities like steel with a result the Railways have increased haulage charges.
Private container train operation was the Railways’ first public private partnership. Many of the 14 container operators are bleeding and industry insiders say some of them want to exit. "Any exit might be detrimental to the overall PPP initiative of Railways, so they should resolve this issue amicably," he said.
Out of 16 licenses given out by the Railways in 2006, Reliance and Pipavav Rail Corporation Ltd have not started operations. The Railways move around 35 million tonne of container traffic of which 70 per cent is moved by its own undertaking Container Corporation of India (Concor) and the remaining by CTOs.
According to a senior railway official, there was an unwritten understanding with CTOs that they would aggregate the piecemeal container traffic and not to eat away from the bulk traffic of Railways. “As the freight traffic cross-subsidises the passenger traffic, losing the bulk traffic would be detrimental for the Railways and the nation,” he said.
Countering the railway charge, CTOs say the Railways have a rake-to-rake concept of carrying the freight traffic rather than piecemeal indents. “As a result, there is a lot of untapped market of piecemeal indents of the bulk traffic which is being catered by other means of transport. The private operators were primarily aggregating smaller indents of bulk traffic and charging at competitive rates,” said an executive representing one of the players who did not want to be quoted.
Although there is an admission about the aberrations of private players’ eating away Railways' bulk traffic, the differential haulage rates by the Railways has squeezed their margins, he said.
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The concession agreement signed between the Railways and CTOs did not exclude any commodity in particular but the Railways there was no violation of contract conditions in charging private operators with differential rates based on commodities. The railways are charging CTOs a higher haulage for moving bulk commodities compared to other containerised cargo. The dispute is over around 9 MT of the domestic traffic. CTOs have to pay haulage charges to the Indian Railways for using its facilities such as track, locomotive and signaling systems. This makes CTOs largely dependent on the Railways. One of the senior executives of the CONCOR 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."
According to CTOs, the level-playing-field that the Railways 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 that Concor is charging them prohibitively high price for access to terminals built on railway land. Operators facing problems in land acquisition for construction of infrastructure. They want land at the same subsidised cost as it had been given to CONCOR but the railways cannot move on this proposal since the Finance Ministry has put on hold leasing or selling of railway land, said the railway official. The private operators' demand for a fixed transit time has also not been met with the Railways saying that it will be in a position to consider guaranteed transit time and fixed time table only on the Dedicated Freight Corridors. CTOs also feel that the Railways has an overlap of professional interests of being the interpreter, policy maker and the implementing body.
The Railways has 63 per cent stake in CONCOR and the key professionals from the Railways come on deputation to CONCOR. CTOs hold this view that CONCOR surpasses bureaucratic hassles faced by private operators. The CTOs entry brought in Rs 540 crore to the Railways. With the implementation of Private Freight Terminal (PFT) Policy in 2010, the Railways had opened up innumerable underutilised private rail sidings across the country for the CTOs.