India's Concor to invest in private freight terminals and warehousing

CONTAINER Corporation of India (CONCOR), the corporate arm of Ministry of Railways, is diversifying its offering into private freight terminals and cargo facilities after strong export-import (Exim) trade supported by Mundra port.

The company, on its way to corporatisation or "navrantnas" status, saw a net profit increase of four per cent in the first quarter led by container growth of 6.15 per cent to 5.32 million TEU.

India awards categorisation of companies as jewel rankings, its highly-efficient state-run firms are awarded "maharatnas" or mega-jewels and just below this "navratnas" firms that allow government-owned companies autonomy in investment, subsidiaries, mergers and capital expenditure.

Concor plans to focus on three logistics parks in Bengal at Durgapur, Dankuni and Siliguri with the latter to house a perishable cargo facility. Each park requires 100 acres of land from an investment amount of INR7.6 billion (US$136.4 million) and overall five-year spend until 2017 of INR60 billion cited a report from The Hindu's Business Line.

The move into the private freight sector in terminals at two locations will support non-containerised cargo and a new revenue stream. The state introduction of a 66-kilometre dedicated freight corridor (DFC) by 2017 will increase train speed.

Domestic container market was down slightly in the first quarter by 14,429 TEU year on year attributed to higher haulage costs reflected in a slight slip in its exim segment of 0.3 per cent share.

High haulage costs on heavy commodities in the domestic sector of pig and sponge iron has been relaxed by the government following a drop in volumes of 18 to 20 rakes of pig and sponge iron a month to seven. Relaxing rules on these commodities should support a rebound, said Concor managing director Anil Kumar Gupta.

Its volumes from the Port of Mundra were the most robust in the first quarter almost doubling from same period 2011 accounting for 55 to 60 per cent of the handling of the port's rail containers, a share of 17.1 per cent from same period of 10.9 per cent. At all other ports its share of container volume dropped; JNPT by five per cent, Chennai down three percentage points and Pipavav by 0.1 per cent only.