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The railways are gearing to set up Logistics Corporation of India. A move announced in the Budget of 2012, it is an effort to graduate from a bulk commodity carrier to a full logistic solutions provider.
The proposal to set up the corporation could be one of the first to go to the cabinet for approval.
The railways' equity contribution would be in the form of land for developing warehouses and facilities. According to a feasibility study by Rail India Technical and Economic Service (RITES), 28 locations have been identified where the traffic volume is two million tonnes a year. The cities include Mumbai, Delhi, Ahmedabad, Jaipur, Visakhapatnam, Chennai, Surat and Kolkata.
The surplus railways land in these cities would be given to private parties for developing warehousing solutions. Or, existing good sheds could be modernised. There is also a proposal to build multi-modal parks.
According to officials, the Central Railside Warehouse Company manages warehouses.
Sachin Bhanushali, president, GatewayRail Freight, said, "We are open to the possibility of engaging with the railways in the logistics business. We could look for equity participation in some and make use of common user facility for others."
The railways earns a majority of its freight revenues by transporting seven bulk commodities like coal and iron ore. Its share in the freight traffic has dropped to 33 per cent compared to 90 per cent in 1950s.
Officials said the retail sector would grow at a much faster pace and the high-margin business had incentives for the transporter. The corporation is expected to be a joint venture. It would use a mix of road and railways, said an official.
Vishwas Udgirkar, senior director, Deloitte India, said, "The project, in principle, was a good idea but one needs to look at operational issues like choked railways network and the slow speed of freight operations."
CHOO-CHOO
* The railways are gearing to set up Logistics Corporation of India
* The proposal to set up the body could be one of the first to go to the cabinet
* It is an effort to graduate from a bulk commodity carrier
