The Finance Ministry has returned a proposal of NITI Aayog for strategic disinvestment of the Centre’s stake in Container Corporation of India Ltd (CONCOR) on the ground that the move could potentially lead to a public sector monopoly becoming a private sector monopoly.
The Aayog is re-examining its proposal in light of the Ministry’s response, it is learnt. It is also taking on board the views in this regard of the Railways Ministry under the administration of which CONCOR operates.
The logistics company, a network of 64 terminals, offering scheduled and on-demand rapid rail and road services between the hinterland and ports, and between terminals across the country, is the only listed company of Indian Railways with a cash surplus of Rs.2,400 crore and zero debt on its balance sheet.
Final decision A final decision on whether the proposed strategic sale — one of a set of 22 such sales being planned — is to be dropped or amended in order to remove the said concern will be taken keeping in mind the views expressed in inter-ministerial deliberations.
In the discussions so far, the Railways Ministry has expressed its openness to a stake sale, including to foreign bidders, in the public sector unit, a Finance Ministry source said.
“The Railways Ministry has pointed out that the Competition Commission of India found no abuse of market dominance by CONCOR… it has been decided that a way of addressing the Finance Ministry’s concerns will be found… there is an agreement that there should not be a private sector monopoly in the logistics sector,” he told The Hindu.
In a 2006 case, the anti-trust watchdog Competition Commission of India had ruled that Indian Railways and CONCOR had not abused their dominant position in the freight services segment.
The Commission had, however, observed that allegations of frequent changes by the Indian Railways in haulage charges did raise some concerns on the larger issue of the link between policy design and incentives for private participation. It recommended that the Ministry examine if such changes disincentivise private players.
“The Finance Ministry’s concerns stem from the Commission’s observations about the Railway Ministry’s role in the fixing of charges,” the source explained.
