The disinvestment of Container Corporation of India (CONCOR) is not moving ahead and is at status quo because of concerns raised by its parent organisation, a senior government official said.
“Regarding the strategic sale of CONCOR, the railways has raised some direct concerns. NITI Aayog is on board for the divestment of CONCOR but the railways is not keen to sell the asset. There are many things to be done before it can happen. Currently, it is at status quo,” the official told Moneycontrol.
This means the plan to sell a 30.8 percent stake in CONCOR, worth around Rs 12,000 crore, has been delayed. The proposal needs a push from the rail ministry, since as the nodal ministry, it has to go along with the sale, the official said.
"Unless the internal processes get completed, we cannot look at issuing EOIs (expressions of intent) for CONCOR. I can't say when the EOIs for CONCOR will be issued. It is difficult to say if the transaction will get completed this fiscal," another senior government official had told Moneycontrol earlier.
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The Finance Ministry had not responded to an email inquiry till the time of publishing.
The government in September had come out with a new land leasing policy after market participants raised concerns over the land licensing fees being paid by CONCOR. The cabinet decided that the new land lease charges will be levied at 1.5 percent of the market value of land per annum with annual escalation of 6 percent.
CONCOR currently runs 61 inland container depots, of which 26 are on land leased from Indian Railways. These 26 terminals account for more than half of the annual revenue of the company. CONCOR is expected to pay land lease charges of Rs 450-490 crore for 2023-24 after it had estimated the payout at Rs 450 crore for 2022-23.
The cabinet in November 2019 had approved the strategic sale of a 30.8 percent stake, along with transfer of management control, in CONCOR out of the government equity of 54.80 percent. The government will retain a 24 percent stake, but without any veto powers.
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The Department of Investment and Public Asset Management (DIPAM) had in October last year held roadshows to gauge investor interest. DIPAM has appointed L&L Partners as the legal advisor for the partial divestment. Deloitte Touche Tohmatsu India has been roped in as transaction advisor and RBSA Valuation Advisors LLP as asset valuer.
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