What was announced in the 2005 Railway budget has at last been implemented. The decision to open up container operations and end the monopoly of the Container Corporation of India (Concor) has come not a day too soon. Railway Minister Lalu Prasad and Railway Board Chairman J.P. Batra have unveiled a plan for bringing competition into play so that the proportion of container freight moved by rail is enhanced. This is only a first step in the process and it should take some time for the official agencies and private sector to meet the requirements and start utilising the facility. On the face of it, the Railways appear ready to create a level playing field for all operators, including Concor, to compete for their share in container freight traffic, which has been steadily increasing. Aside from spelling out the schedule of registration fees, the categorisation of routes, and other information related to the new regime, they have made it clear that locomotive allocation and priority in operation will be on first-cum-first-served basis. Containerised export-import traffic in India, which has been growing at 15 to 20 per cent, is expected to double over the next five years from the current level of 55 million tonnes. Evidently, Concor, by itself, cannot handle this growth. It is therefore imperative that other players are allowed to enter the field so that the necessary logistical and operational framework is put in place. The decision to go in for a dedicated freight corridor on the Delhi-Mumbai and Delhi-Kolkata sections should also be seen in the context of this growing demand for movement by rail.
If the stock market sentiment and Concor's own planning are any indication, the decision to end its monopoly should not affect the corporation adversely. The market remains bullish on it. In fact, its stocks outperformed the Sensex during the past quarter and more. Further, Concor has moved fast to sign agreements with the Central Warehousing Corporation and the Pipavav Railway Corporation Ltd., on pooling of resources so that it can stay ahead in the race. Aside from being the leading player, it wants to put in place various links for a multi-modal transport chain with a view to providing door-to-door cargo service, and this it would like to do without losing ground to road transport. A welcome feature of the qualifying clauses for new operators relates to connectivity with rail-linked inland container depots (ICDs). Companies wanting to bid for container movement should arrange for linking up with ICDs, either their own or taken on lease. The Indian Railways appear to be chugging along the right track and, thanks to the steady increase in passenger and freight traffic, the public sector monolith's financial performance is quite promising. The decision to allow the private sector to compete and simultaneously focus on the creation of infrastructure can well be a catalyst for the logistics industry, at a time when the economy is poised for a shift to a higher trajectory of growth.