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Container train operators (CTOs) – who have not built terminals and operate in the domestic segment - can breathe easy.The Railway Ministry has decided to hold in abeyance its earlier proposal to increase terminal access charges for CTOs. The companies that focus on domestic segment include Arshiya Rail, Boxtrans, Innovative B2B, and Kribhco Rail Infrastructure Ltd, confirm multiple industry sources. INVESTMENT Terminals – where the CTOs load and unload cargo - require investments of about Rs 150 crore (for a typical 40 acre size of land), according to industry estimates.On April 27, the Railway Ministry had proposed to increase the terminal access charges by 36 per cent.On May 1, the Ministry decided to hold the proposed hike in abeyance. SETTING UP RAIL-LINKED TERMINALS ... Read more...
Industry opinion is divided on whether the move will propel the container train operators to invest in setting up more terminals. As a part of the concession agreement with the Indian Railways, all container train operators (CTOs) were required to set up rail-linked terminals. But the entrants have not invested as much in setting up terminals, which requires close to 12 times the capital investment in a rake. There are six terminals built by the newer container train operators while Container Corporation of India (Concor) has a network of over 60 terminals. The CTOs, meanwhile, had built six terminals on February 6, and proposed to build another six terminals. In a circular issued on May 1, the Indian Railways stated “The revised rates of terminal access charge is not to be given effect till further orders.” “This move - of the proposed hike in terminal access charges being held in abeyance – will propel the container train operators to set up more terminals. It will also help improve their financial health by reducing their cost of operations,” said Mr R.C. Dubey, President, Association of Container Train Operators (ACTO). However, another industry official from a container train company, pointed out the many operators who do not have enough traffic and thus do not operate many trains will not invest in newer terminals.