The Minister of Railways, in his budget speech on 26th February, 2005, had announced that the Ministry of Railways (MoR) and the Government of India would permit private operators to run container trains. Before then, a subsidiary of the Indian Railways, Container Corporation (CONCOR) was the sole operator of container trains. The private operators were to develop their own terminals and rolling stock. Traffic was proposed to be moved by block rakes between Inland Container Depots (ICDs) and gateway ports. However, the policy did not clearly bring out the role of CONCOR vis-à-vis new operators and the guidelines were found to be restrictive in implementation. As the policy was not sufficiently attractive and prospective entrants were apprehensive of CONCOR’s role, it failed to draw any response. Subsequent to the budget announcement, in a meeting of the Committee on Infrastructure (CoI) held on 12th May, 2005, it was decided that MoR would prepare a scheme to allow entry to various operators. However, entry of other entities in 2007 has been driven by larger public policy concerns. In the process, issues such as resistance of the incumbent, erection of entry barriers, denial of level playing field, use of a closely held organization as a consultant, and conflicting roles of IR as licensor, regulator, service provider, and operator came into sharp focus. This paper attempts to review the process starting from the policy announcement (February 2005) to evolution of a Model Concession Agreement (January 2007) and shows how policies were influenced by the incumbent to restrict competition by creating barriers on the one hand and how an alternate view provided by external entities, like the Planning Commission and other non-IR stakeholders significantly altered the course of action leading to entry of a large number of competing players.
Introducing Competition in Container Movement by Rail
Author : Sebastian Morris, Ajay Pandey, G Raghuram, Rachna Gangwar