Railway expects to raise ₹8,000 crore from divestment from CONCOR India

New Delhi, India (Urban Transport News): The Central Government cabinet on September 7, 2022, lowered the railway land license fee from 6% to 1.5% for certain usages. Also, the lease period has been increased to up to 35 years from presently 5 years. This decision will speed up the sale of the Government's stake in Container Corporation of India (CONCOR).

This new development is made in line with NITI Aayog's recommendation to keep the railway land leasing fee for containers below 3%. The move will also facilitate strategic divestment of government-owned CONCOR by making the deal more lucrative for private players.

Concor, under the aegis of the railway ministry, is engaged in the transportation and handling of containers. With its divestment from CONCOR, Indian Railways is expected to raise Rs 8,000 crores as per the current valuation.

CONCOR is also engaged in the operation of logistics facilities, including dry ports, container freight stations and private freight terminals. Presently, it has 61 container depots, out of which 26 are on railway land leased on a container license fee basis.

In March 2020, Railway Board notified an LLF regime for industrial use of its land and extended the same to CONCOR. According to the policy, the transporters were required to pay 6% of the land value in the first year of the license, which increases by 7% every year.

According to the Department of Investment and Public Asset Management (DIPAM), many potential buyers had pointed out at the license fee was too high and sought a reduction to 3%. However, the matter was stuck as the Indian Railways was reluctant to slash the fee.

The Railway ministry is working on a detailed proposal and it will be sent to the Cabinet for approval. The government can then issue an expression of interest for the sale of its 30.8% stake from the CONCOR. Presently, the government has 54.8% equity in the company.

The Central Government has budgeted Rs 65,000 crore from divestment proceeds for the current financial year.