Rlys to extend Concor's rent rebate for 2 years

The Railways have decided to subsidise land rent for Container Corporation of India (Concor) for two more years.

This will tilt the balance in favour of the company, once private companies are allowed into Concor's domain of transporting containers by rail.

Earlier, the Railways had proposed that the subsidy be withdrawn and Concor be asked to pay rent at market rate.

"At present, land lease charges that Concor pays is about 20 per cent of the market rent," a railway ministry official said.

The proposal was made on the basis of Concor being a profit-earning company. In addition, if the container business was being opened up for private participation, it was advisable that market conditions prevailed, the official said.

But the Railway Board, after discussions with Concor executives, decided to continue the subsidy for two more years, after which the matter might be re-examined, sources said.

This comes at a time when the railway ministry has been looking at providing a level playing field to new private players by withdrawing some freight concessions that Concor enjoys.

For instance, Concor gets a 22 per cent rebate on freight for carrying flat wagons. "Concor pays rent at book value, which is at the rate that prevailed 155 years ago but the new players will have to pay market rent," an executive from a company interested in entering the business said.

Concor had properties in prime locations owned by the railways, like the Tughlakabad internal container depots in Delhi, the executive added. Even on land owned by central railways, it owns various container freight stations.

Concor already had an edge due to its monopoly in the business for years, and had used the advantage to build a formidable infrastructure base, a ministry official said.

The railway ministry is formulating a policy for private participation in container operation, subsequent to the announcement made by Railway Minister Lalu Prasad in the railway budget for 2005-06.