Concor to drop 10 under-performing depots owned by Indian Railways
INDIA's Container Corporation of India Ltd (Concor) plans to sell at least 10 under-performing container depots built on land leased from the Indian Railways (IR) at concessional rates, as it prepares for privatisation
INDIA's Container Corporation of India Ltd (Concor) plans to sell at least 10 under-performing container depots built on land leased from the Indian Railways (IR) at concessional rates, as it prepares for privatisation.
The move is aimed at reducing the financial burden as the government tweaks a plan directing the state-run rail hauler of containers to purchase land owned by IR, on which it has built half of its 86 inland container depots (ICDs), reported Chennai's daily Hindu.
Resolving the land issue is key to the planned privatisation of the Navratna PSU, to address allegations of transfer of IR land to a private entity at low rates.
The government, which holds a 54.8 per cent stake in Concor, will privatise it by selling a 30.8 per cent stake to a private company along with transfer of management control.
Hindustan Infralog Pvt Ltd (HIPL), a joint venture between Dubai-based DP World and India's National Investment and Infrastructure Fund (NIIF), Adani Ports and Special Economic Zone Ltd (APSEZ) and PSA International are expected to bid for the government's stake in Concor.
At current the market price, the government's 30.8 per cent stake in Concor could fetch at least INR180 billion (US$2.4 million).
Including its flagship facility at Tughlakabad near Delhi, 41 of Concor's 86 ICDs are operating on land leased from IR, for which it pays a land licence fee per laden TEU.
In effect, Concor pays land licence fee on 40-45 per cent of its overall volumes because they are handled at facilities built on IR land.
Concor will buy the IR land on which it runs the remaining facilities at six per cent of the circle rate ?the rate at which the government recognises land value for a particular site, the official said. 'Where there is not much traffic, there is no point buying land, paying six per cent of the circle rate and keeping it idle,' he added.
The land transaction will be in the form of a 99-year lease. 'It will be tantamount to Conor buying IR land at six per cent of the land value; that itself will be huge ?it comes to about INR80 billion, funded mainly through debt,' the officer said.