Date:25/02/2006 URL: http://www.thehindubusinessline.com/2006/02/25/stories/2006022501380700.htm

Back Gateway Distriparks to invest Rs 200 cr for new facilities

Amit Mitra

Mumbai Feb. 24

Having received an in-principle approval from the Indian Railways to move container trains, Gateway Distriparks Ltd (GDL) is gearing up to invest Rs 200 crore initially to set up the required facilities.

GDL is the sixth private company to get the Railways' approval for moving container trains. Fourteen companies, including Container Corporation of India, Central Warehousing Corporation and the JM Baxi Group, have submitted applications, seeking entry into this sector. GDL had submitted application in the Rs 50-crore category for a nation-wide permit.

NEW PLANS

The company will be initially moving containers between its existing rail-linked ICD at Garhi Harsaru, Gurgaon and the ports at Mumbai, Pipavav and Mundra.

Capt. Kapil Anand, GDL's Chief Executive Officer, told Business Line that the company proposed to buy 10 trains of 45 wagons each at a cost of Rs 120 crore. "Each train has a carrying capacity of 90 TEUs, which means a combined carrying capacity of 900 TEUs.

As we intend to move cargoes both ways, the total capacity for a round trip will be 1,800 TEUs. With four round trips a year, our capacity will be 7,200 TEUs a month," he explained.

The company also plans to add new rail-linked inland container depots as part of its programme to consolidate its presence in the rail container segment, either by setting up new ones or tying up with existing depots. "Immediate locations for our new ICDs will be Nagpur, Jallandhar and Surendranagar. "For this, we have earmarked another Rs 150-200 crore, which will be implemented in a phased manner. "We are financially comfortable to make these investments," he said. The company had raised $85 million through its maiden GDR offer in December last.

Big potential

Capt. Anand sees a lot of potential in this sector, which had been monopolised by Concor.

The country's container traffic is estimated at 4.4 million TEUs at present, of which about 30-35 per cent is moved by rail.

`Freedom' in tariffs

Industry analysts feel that with the entry of new players in the sector, the freight rates charged by Concor may come down, especially as the new players have been given a free hand to decide on their tariffs.

Concor at present charges an average freight rate of Rs 17,000 per TEU.