Date:11/03/2004 URL: http://www.thehindubusinessline.com/2004/03/11/stories/2004031100580600.htm

Back Concor plans joint venture with Indian, Nepalese cos

Our Bureau

Kolkata , March 10

THE Container Corporation of India (Concor) is to soon float a joint venture company in partnership with two firms — one Indian and the other Nepalese — having experience in handling transportation and clearance of bulk and containerised cargo, and has accordingly invited expressions of interest (EoIs).

The joint venture company, once constituted, will bid for the tender floated by the Nepalese authorities to select a terminal management contractor for the inland container depot (ICD) set up with World Bank assistance at Birgunj in Nepal. It will be about three months before the terminal management contractor starts working, according to informed sources.

It might be noted that the Nepalese authorities concerned went for retendering to select the terminal management contractor. The earlier tender floated in this regard was rendered invalid following signing of the bilateral agreement on railways between India and Nepal in November last year.

According to the agreement, providing for opening up of a railway link to landlocked Nepal from the port of Kolkata, only three types of firms, either an Indian or a Nepalese or a joint venture of the two, will be eligible for bidding for the terminal management contractor's job. The earlier tender was open for bidding by any firm.

The selected terminal management contractor will be entrusted with the management and operation of the Birgunj ICD on payment of royalty to the Nepalese authorities. The royalty amount, according to informed sources, will be about Rs 5 crore (in Indian currency) annually. Considering the volume of traffic to be handled by Birgunj ICD, at least initially, the amount, it is felt, is rather on the high side.

The Birgunj ICD will initially handle Nepalese exports and imports routed through Kolkata port, i.e., imports from a third country and exports to a third country. In 2002-03, Nepal's imports in containers were 25,418 TEUs and exports 1,851 TEUs. In first six months of the current fiscal, the imports were 14,347 TEUs and exports 1,275 TEUs.

At this level of throughputs, generating enough revenue for royalty payment of Rs 5 crore annually after meeting all the expenses may be difficult, it is felt. The throughput level is to increase substantially as and when the ICD will be thrown open to the bilateral trade, i.e. trade between India and Nepal.