The Hindu Business Line : Box operators irked by Rlys' policy change

Container operators plan to represent to the Railway Ministry against its recent policy change that bars movement of some bulk cargo through containers.

Late last month, the Railways brought out a directive restricting movement of ores, minerals, coal and coke by containers.

Though these commodities are not traditionally moved through containers, the very act of such a restriction reflects an "uncertain policy regime for the business," according to container operators.

HEAVY GOODS GETTING BOXED

Given the ease of handling containers, several heavy goods, such as iron ore, steel, petroleum products and cement, are now getting containerised.

Barring container movement of such commodities could affect the business plans of operators because such moves might restrict market access.

"Today, the Railways has barred movement of ores, minerals, coal and coke. Tomorrow it may bar other commodities from being moved in containers.

Such moves amount to changing the rules of the game midway," rued several container operators, when contacted.

If the Railways wanted to bar commodities from being moved in containers, it should have clearly spelt out these issues before it took licence fees from the operators, they added.

Ten operators have paid Rs 50 crore each for obtaining the licence to move containers across the country and on export-import routes, while four container operators have taken route-specific licences by paying Rs 10 crore each.

UNPREDICTABLE HIKES

As it is, the operators have been quite peeved at the manner in which the Railways has been increasing the haulage charges for container movement twice per annum; these are brought about outside the Budget announcements. They have been demanding that the Railways increase the haulage charges once a year, which should be announced in the Railway Budget. Container operators pay haulage charges to the Railways for using its track and signalling infrastructure.

This year, the Railways has already announced a second round of increase in haulage charges — the first hike was from April 1, and the second will come into effect from November 1.

The impact of the April 1 increase can be gauged from the fact that Container Corporation of India (Concor) has paid Rs 832.32 crore as haulage charges for April-September, about 43 per more than in the corresponding previous period; of this over 20 per cent increase in charges is on account of the hike.

Policy DELAY

Now, over six months after the Railways accepted licence fees from container operators and issued them in-principle approvals, the model concession agreement is yet to be firmed up and signed.

This delay, according to some operators, ia making it difficult for them to raise funds as financers want to know the exact terms and conditions before extending loans.

"All the are idling in the consolidated accounts of government. Why did the Railway collect funds if it was going to take this long for it to finalise its agreement with players," asks an industry observer.

REGULATOR REQUIRED

Not surprisingly, several container operators see the need to have a sector regulator to address such issues. However, the Railway Minister, Mr Lalu Prasad, is clearly against any regulator.

At a recent conference, Mr Sanjay Gupta, CEO-Infrastructure, Adani Logistics, pointed out, "We clearly see the need to have a super-regulator. At least, it should function as a super coordination body among the Railways, coastal shipping, highways, aviation... "

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