Concor privatisation hits wrong track with land licence fee revision

The Railway Ministry has introduced a new method of calculating the land licence fee it levies on Container Corporation of India Ltd (Concor) for facilities built on Indian Railways land in a development that has the potential to derail the privatisation of the state-run rail-hauler of containers.

Beginning April 1, the annual land licence fee will be calculated at the rate of 6 per cent per acre of the industrial land value where the terminal is located, according to a circular issued by the Railway Ministry.

Till FY20, 41 of the rail hauler’s 84 inland container depots (ICDs), including its flagship facility at Tughlakabad near Delhi, were running on land leased from Indian Railways for which it paid a land licence fee of 1,175 per loaded twenty-foot equivalent unit (TEU).

For the last three years, the land licence fee rate was linked to the company’s percentage increase in profit after tax (PAT). In FY20, the land licence fee was raised to 1,175 per loaded TEU from 1,015 per loaded TEU in FY19.

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