Indian intermodal licence application response disappoints
Expectations of many applications for government rail container licences were disappointed last week as only one surfaced in Railway Minister Lalu Yadav's budget in the latest round of bidding.
According to The Times of India, Kribhco submitted the sole application and paid a licence fee of Rs50 crore (US$12.4 million). No other firm applied, despite an extension of deadline.
Kribhco's entry comes to many as a surprise, said the newspaper, because Reliance Industries, NYK and Mitsui's decided not to bid. NMDC and Gammon India though had expressed interest according to sources.
Experts attribute the poor turnout to capacity constraints, that many expect will result in huge bottlenecks. The Delhi-Mumbai run, the most lucrative route, can only handle eight trains daily, perhaps rising to a peak of 10 a day.
This may be stretched to five more trains a day, but shared by the 14 earlier applicants, new entrants are neither welcome nor viable. Also, state-run railways reserve the right to restrict any commodity movement, and it is suspected that they may take away the most lucrative ones from the private sector. They can also levy higher haulage rates from container operators at will, according to the report.
This, together with a shortage of freight handling sidings on track, make business prospects unattractive, say the newspaper's sources.
Last month, when intermodal services were opened to the private sector, the railway ministry expected 25 applications but have only attracted 14, earning Rs540 crore in licence fees.
Sources told the Times of India that invitations were sent to 300 firms, 70 of which included RIL, GE Infrastructure Ltd, Shipping Corporation of India, Blue Dart Express Ltd, Gati and Zim, who sent representatives to a meeting to explore the matter.
According to The Times of India, Kribhco submitted the sole application and paid a licence fee of Rs50 crore (US$12.4 million). No other firm applied, despite an extension of deadline.
Kribhco's entry comes to many as a surprise, said the newspaper, because Reliance Industries, NYK and Mitsui's decided not to bid. NMDC and Gammon India though had expressed interest according to sources.
Experts attribute the poor turnout to capacity constraints, that many expect will result in huge bottlenecks. The Delhi-Mumbai run, the most lucrative route, can only handle eight trains daily, perhaps rising to a peak of 10 a day.
This may be stretched to five more trains a day, but shared by the 14 earlier applicants, new entrants are neither welcome nor viable. Also, state-run railways reserve the right to restrict any commodity movement, and it is suspected that they may take away the most lucrative ones from the private sector. They can also levy higher haulage rates from container operators at will, according to the report.
This, together with a shortage of freight handling sidings on track, make business prospects unattractive, say the newspaper's sources.
Last month, when intermodal services were opened to the private sector, the railway ministry expected 25 applications but have only attracted 14, earning Rs540 crore in licence fees.
Sources told the Times of India that invitations were sent to 300 firms, 70 of which included RIL, GE Infrastructure Ltd, Shipping Corporation of India, Blue Dart Express Ltd, Gati and Zim, who sent representatives to a meeting to explore the matter.