Reliance Infra And Gateway Distriparks - On The Right Track

Reliance Infrastructure, Gateway, Adani, CCI, CWC and P&O among contenders.

As many as 10 companies, including Reliance Industries, Adani Logistics, Gateway Distriparks Ltd, Hind Terminals, MICT (P&O Ports), Indian Infrastructure and Leasing Mumbai, Sical Chennai, Dinesh Emirates ETA, Central Warehousing Corporation (CWC) and Container Corporation of India (CCI) have bid for running freight train services all over the country.

The bidders have submitted Rs 50 crore each as registration fee for running the freight trains, including on the Delhi-Mumbai route. Four other bids, for lines excluding the Delhi-Mumbai route, were submitted by Delhi-Assam Roadway Corporation, JM Bakshi, Bothra Shipping and PRCL with deposits of Rs 10 crore each.

Permissions for container routes are expected to be given before the end of this financial year. An official said the railways had written to the industries ministry seeking a clarification on the rules for foreign direct investment in companies that would participate in the freight sector. “We have asked whether FDI is permitted or not and if so, what should be the cap on it,” he said. As of now, Indian subsidiaries of foreign entities have been permitted to bid for freight routes. However, foreign companies have not been allowed to participate in the container sector.

The lack of availability of rolling stock is going to be a problem in the initial days for these companies. The companies will have to buy rolling stock from wagon manufacturers. The railways will not have any role to play in the purchase of wagons. Some of the companies that have bid for container lines are into shipping and will now be able to move their goods to ports at a faster pace. However, a company like Reliance Industries is expected to use containers exclusively to transport its own raw materials and finished goods.

Under the new container policy, private players are expected to invest in rolling stock and inland container depots. The railways will only invest in laying lines and improving and expanding the existing ones.

-Business Standard