The lease rates for industrial use of the railways’ surplus land may be slashed across the board soon with an extension of the licence period to 35 years from 5 years now for private players. The move could not only encourage commercial use of these land parcels, including as real estate, but could also boost investor interest in Container Corporation of India (Concor), which is being sold to a strategic buyer in the current financial year.
It was only in April this year that the railways notified a new land licensing fee (LLF) regime, and extended it to its very own Concor. Until then, Concor had been paying land lease rentals to the transporter on a per-container (20-feet equivalent unit container) basis, which entailed much lower outgo. The LLF being charged by the transporter now is 6% of land value in the first year of licence; the rate will increase at a rate of 7% annually to factor in inflation.