“We are not losing any volumes due to this; we are not handing over any area at Tughlakhabad which is linked to our business,” Ajit Kumar Panda, Director, Projects and Services, CONCOR, told ET Infra.
“If the Indian Railways takes over whatever we are offering, we will save around Rs 30 crores annually because we are paying around Rs 300 crores for that site. So, if we are giving up around 10 percent of the land size and if everything is accepted by the Indian Railways, it will help me save 10 percent,” Panda said.
CONCOR expects its total payout to Indian Railways on LLF to reduce to about Rs450 crores from the Rs 500 crores estimated at the beginning of the year.
The inland container depot located at Tughlakhabad, spread over 195 acres in the heart of Delhi, is CONCOR’s biggest facility, handling over 3 lakh twenty-foot equivalent units a year.
“For years, it has been our highest revenue earner, that’s why we are able to sustain this Rs 300 crore LLF. But, every year, the LLF is increasing by 7 percent, so we need to balance it, that is why we are trying to reduce areas which we are not using,” Panda stated.
Beginning 1 April 2020, the Railway Ministry decided to charge the annual LLF from CONCOR at the rate of 6 percent of the industrial land value per acre where the terminal is located, which will escalate by 7 percent annually.
CONCOR currently runs 61 inland container depots (ICDs) of which 26 terminals are built on land leased from Indian Railways. These 26 terminals account for more than half of the annual revenue of the Company.
The LLF for the Tughlakhabad facility was finalised a few months ago after lengthy negotiations, resulting in a Rs 100 crore increase on top of what was paid in FY23.
Mohammed Azhar Shams, Director, Domestic, CONCOR said that the rail hauler had taken some extra land at Tughlakhabad a few years ago and developed it hoping it would come in handy if additional business came.
“We are giving LLF on that also, but that area is not being commercially used at this point in time, so we are surrendering that,” Shams noted.
“This is part of our efforts to save on LLF to the extent we could without losing even a single container,” he said.
“With the increased LLF, the terminal at Khatuwas coming up very well and Dadri getting connected directly to the DFC, that additional land and whatever we have developed we find that it is not going to be used commercially in the near future and if we surrender that then we shall be saving some good amount on LLF,” shams added.
