NEW DELHI : Container Corporation of India (CONCOR) on November 3 said that it plans to surrender a portion of land at its inland container depot (ICD) in Tughlakabad (Delhi) in a bid to reduce its land licensing fee (LLF) payout to the Indian Railways.

“We are planning to surrender a portion of our land at TKD (Tughlakabad) ICD in the current quarter and we have already surrendered one terminal at Baroda (in Q2FY24),” the company’s management said in a post-earnings conference call.

CONCOR has paid Rs 215.57 crore as LLF in the first half of 2023-24 when compared to Rs 191.49 crore that was paid in the same period a year ago.

The company’s total land lease charge for 2023-24 is expected to fall to Rs 450-470 crore once it surrenders land back to the Indian Railways from the earlier expected Rs 500 crore at the start of FY24.

“LLF at TKD is the highest CONCOR is paying when compared to other ICDs, by surrendering land at TKD and Baroda we intend to reduce our LLF for FY24,” the company’s management said.

CONCOR’s management added that they will continue to explore ways to return land parcels to the Indian Railways in order to keeps its LLF payouts in check.

Despite surrendering back land to the Indian Railways, CONCOR does not expect any fall in volumes.

“CONCOR had made alternate provisions to make up for the land being returned to the Indian Railways, as can be seen by our new facility in Baroda,” the company’s management said.

The Delhi Government had earlier this year increased the land leasing charge for Tughlakabad ICD by Rs 100 crore annually, which would reflect as a Rs 22-23 crore payout as part of CONCOR’s expenses every quarter.

Concor pays land lease charges at the rate of 6 percent per annum on the market value of industrial land with an annual escalation of 7 percent, for terminals run on railway land.

The move to return land at Tughlakabad ICD also comes at a time when CONCOR is facing intense competition for volumes from the likes of Gateway Distriparks and other container train operators.

According to a recent report by brokerage firm ICICI Securities, CONCOR is losing its market share mainly in the western market (Mundra) and the Delhi-NCR market.