NEW DELHI: The policy on long-term leasing of Indian Railways (IR) land approved by the Union Cabinet on 

7 September will help break the monopoly of Container Corporation of India Ltd (CONCOR) over rail-linked inland cargo terminals ahead of a planned privatisation of the State-run firm, and ward off concerns that its strategic disinvestment would convert a public monopoly into a private monopoly, according to people tracking the sector.

“The Cabinet nod for the long-term leasing of Indian Railways land will create a level playing field for private container train operators who have been suffering due to the artificial monopoly that CONCOR has created through government land support,” said a top official with one of the container logistics firms.

CONCOR currently runs 61 inland container depots (ICDs) of which 25 terminals are built on land leased from Indian Railways (IR).

The Cabinet approved policy allows leasing of IR land to set up cargo related activities for as much as 35 years (from the existing five years) at a land licensing fee (LLF) of 

1.5 percent of the market value of land which will escalate by 

6 percent annually. The Indian Railways currently levy the annual LLF from CONCOR at the rate of 6 percent of the industrial land value per acre where the terminal is located, which will escalate by 7 percent annually.

The Cabinet also decided that existing terminals run on IR land will have the option of switching to the Gati Shakti Cargo Terminals (GCT) policy to get the benefit of a lower LLF of 

1.5 percent of the market value of land and escalating by 

6 percent annually. For this, entities such as CONCOR that are running the terminals on IR land will have to surrender the facilities which will be auctioned by IR for 

35 years through a transparent and competitive bidding process on terms set by the new policy.