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The government’s drive to open up the railway freight business to private players is sputtering out, with the three companies that entered the business last year reporting a combined share of less than 10%.
The private operators blame the 10-month delay in executing the contract between Indian Railways and the train operators.
They said Indian railways has been increasing haulage charges at regular intervals, which cuts into their margins. Then, the railways suddenly decided to ban the movement of certain commodities like iron ore, coal, coke and minerals on the private trains. The operators are also worried by the lack of rolling stock and inland container depots (ICDs).
Industry sources said it would take at least two years for the much-hyped project to gather momentum.
The ministry had granted license to private companies in January 2006, for running container trains, a service so far the monopoly of government-owned Container Corporation of India.
According to Vineet Agarwal, vice-president of DARCL, there is a huge scope in domestic cargo movement as containerised business by railway is about 0.72% of the total India logistic market.
Srei Infrastructure Finance Ltd, a leading infrastructure equipment and project finance company, has financed almost Rs 106 crore for the project.
A Srei official said, “even a year after the agreement was signed, the project has not taken off the way it was expected to.” Sankalp Shukla, chief executive officer and executive director of InLogistics Pvt Ltd, so far the largest private operator in the segment said the market for containerised traffic on the railways is 250 lakh tonne now, and growing at 20%. Shortage of rolling stock is yet another problem for the private players. “We import rolling stock from China. It is easier for us since we have a base there,” said Shukla. The company is running seven container trains covering 2.1 million km in its pan Indian operation.
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