Container train operators feel the pinch in India

A LARGE number of private sector container train operators (CTOs) inducted by Indian Railways (IR) in intermodal business in January 2006 "are feeling without steam," according to an unidentified senior executive of one of the licensee operators whose comments were cited in a report by India`s Financial Express.
Most of the 16 CTOs who each paid licence fees ranging from INR100 million (US2.1 million) to INR250 million to be registered with Indian Railways now regard the container train operation business as being a "virtual El Dorado," the report said.
It noted that since the concession agreement between IR and the CTOs was signed in January 2007 several issues remain unresolved. Of particular importance to the industry are aspects relating to: service guarantees, rating and pricing policy, maintenance of rolling stocks, commodities which railways do not permit in containers, and difficulties in acquiring land for intermodal terminals.
Another key area for concern among the CTOs is the lack of clarity on the use of railway terminals and private rail sidings for carrying domestic freight. "A prominent spokesperson for CTOs has been irked by bureaucratic delays by the `multiple agencies in the railways...handling approval of terminals` which take `six to nine months.` Another common CTO refrain is that IR itself administers the concession agreement, is the regulator as well as the owner of Concor, besides also being the price setter," the report said.
The CTOs are also complaining that "frequent" tariff changes are hindering long-term contracts with customers, particularly, as rail haulage charges account for about three-quarters of the CTOs` total operating expenses. "IR`s rating structure for CTOs has undergone a change from a uniform per TEU/km rate for all weight slabs to a telescopic weight slab-based rating. In addition, charges have been introduced for haulage of trains carrying empty containers. Some empty haulage is unavoidable due to imbalance in trade flows," the report said.
It noted that for transporting empty containers, IR charges 65 per cent of the rate for loaded containers and for empty wagons at 60 per cent for loaded wagons. The IR also charges for full composition of a train even if a CTO train runs under-capacity load. Additionally, IR charges INR13,500 (US$293) for parking CTO wagons and INR13,000 per day for the stabling of a CTO train set.