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CONCOR privatisation to get boost as Cabinet approves reduction in Railway land license fee to 1.5%

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NEW DELHI : In a move that is expected to set in motion the disinvestment of state-owned Container Corporation of India, the Cabinet approved setting long-term leasing of railway land for cargo related activities for a period of up to 35 years at a rate of 1.5% of market value per annum. Country’s largest rail container cargo operator CONCOR, which operates terminals on land leased from Indian Railways, currently pays land license fees charged at 6% of the market value.

“This new policy will enable integrated development of infrastructure and more cargo terminals. This will increase railways’ share in freight transportation and reduce overall logistics cost in the country. It provides for long-term leasing of railway land for cargo related activities for a period of up to 35 years at a rate of 1.5% of market value of land per annum,” said Minister for Information and Broadcasting Shri Anurag Thakur in a press briefing on Wednesday.

According to reports, stakeholders interested in bidding for CONCOR disinvestment had communicated to the government that the existing land license fee framework was prohibitive in encouraging bids for the state-owned company.

Adani Ports and Special Economic Zone Ltd, India’s largest private port operator is eyeing acquiring stake in CONCOR through the disinvestment process.

“We are very keen on it (CONCOR), it is a strategic asset… one of the big steps that government needs to solve on is how …will be the land licensing fee, I think once that is done, once that is approved we do expect then the sale process to fast track…,” said Karan Adani, Chief Executive Officer and Whole Time Director, Adani Ports and Special Economic Zone Ltd in conference call with analysts on May 25.

The divestment of CONCOR was approved in November 2019 wherein government’s 30.8% stake is opened to be acquired by the winning bidder along with transfer of management control. Government currently holds 54.80% stake in CONCOR. “Ambiguity now is only on the bidding process, details are yet to come out,” said an analyst tracking the logistics sector.

Thakur further highlighted that the new policy will help to create 300 PM Gati Shakti cargo terminals that could be developed over the next 5 years and will also create 1.2 lakh jobs.

“The policy also simplifies railway land usage and right of way for integrated development of public service utilities like electricity, gas, water supply, sewerage disposal, urban transport etc by providing railway land at the rate of 1.5% of the market value of land per annum. For optical fibre cable and other small diameter underground utilities, a one time fee of Rs 1,000 will be charged for crossing railway track,” he said.

A comprehensive policy document will be framed and implemented within 90 days of cabinet approval, the government stated

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