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Freight PPP grinding to halt?

The Railways’ grand plans of privatising containers for freight movement, launched five years ago, appear to be headed for a breakdown, if allegations by private operators are anything to go by.

business Updated: Nov 07, 2010 21:28 IST
Srinand Jha

The Railways’ grand plans of privatising containers for freight movement, launched five years ago, appear to be headed for a breakdown, if allegations by private operators are anything to go by.

In a circular sent on October 29, the Railways hiked haulage rates applicable to Private Container Train Operators (PCTOs) by over 100% for several commodities — cement, stones, iron and steel, metals, petroleum and lubricants.

This has rendered commercially unviable, over half the commodities that are available to PCTOs for movement.

“The October 29 circular flows out of a concerted strategy to derail PPP initiatives,” a spokesman of the Association of Container Train Operators alleged. “We have petitioned Railways Minister Mamata Banerjee and also sought a meeting with chairman, Railway Board, Vivek Sahai.”

The root of the problem appears to be the Railways perception that PCTOs are poaching upon freight traffic carried by the Container Corporation (CONCOR), a Railways subsidiary. “Instead of undercutting CONCOR revenues, PCTOs must aggregate and move high-value traffic like alloys, marbles and tiles,” a Railways official said.

At 14% of GDP, logistics costs in India are among the highest in the world. The share of railways in domestic freight movement is only 30%, while roads account for 65% of freight movement in the country.

With the same length of rail track as India’s 63,000-odd kilometres, China moved 360% more cargo in 2007 — 2,624 million MT to 728 million MT transported by India.

“This is a killer proposition. Private operations will simply wind up, if the approach of the Railways does not change,” ACTO secretary RC Dubey.