Private players eyeing to break Container Corporation of India's (Concor) monopoly in transporting containers by rail may not have it too easy.
Apart from investing in rolling stock and wagons, they may be required to invest in railway infrastructure, including the laying of tracks. This means that port joint ventures like Pipavav Rail Corporation Ltd will have an edge over other private companies.
"We are drafting a policy under which private parties operating on certain routes will have to invest in building portions of tracks," a railway ministry official said. He added that only those companies that had experience in port and rail operations would be allowed to enter this business.
For instance, if a new corridor is being built, a private player may have to fund a part of it in order to ply on select routes. The rail budget had announced that private companies would be considered to meet the the growing demand for container trains.
Ministry officials said a comprehensive policy would be framed by consulting all stakeholders. He added that the ministry was exploring the possibility of competitively deciding on the parties that would be permitted on various routes. Accordingly, the highest bidder would get the contract, they said.
Officials said the system for setting tariffs would be similar to that followed for Concor. Concor is free to set tariffs, as long as it pays certain charges to the railways. The charges vary according to the shareholder agreement signed for different tracks.
Officials said there would be no need to regulate the tariffs. "Predatory pricing may not be a viable option for private companies as they will not be able to lower their tariffs below the charge paid to the railways," an official said.
Sources also added that the trains would be run by the railways but companies could own the warehouses, central freight stations and its own wagons.
The entry of private companies into container transport was allowed in 1993. The move, however, saw a meagre response, with only Central Warehousing Corporation (CWC), P&O and PRCL showing interest.
The government had permitted PRCL to ferry containers on 10 routes in November but the move was reversed when the ministry decided to come up with a separate policy.
Central Warehousing Corporation was refused permission on the ground that Concor had already made huge investments on the Mumbai-Dadri route that it was pitching for.
