The Ministry of Railways has cleared the new land licensing fee (LLF) policy for the Indian Railways and a final call on this will be taken by the Union Cabinet soon, Railways Minister Piyush Goyal said on March 10.
The privatisation plans of Container Corporation (Concor) was kept on hold by the government due to the non-clearance of LLF. “We had a detailed round of engagement with the private sector and also Niti Aayog before finalising the LLF. We had inter-ministerial consultation as well. Now, we have finalised the policy and got my approval too. It is going to the Cabinet soon,” Goyal said, addressing the media. The minister added that he has already signed the proposal and it was sent to the Cabinet secretary for further processing.
According to a source aware of the development, the new policy will bring down the land lease rates for use of railway land for industrial purposes to less than 3 percent.
To create a level playing field, the new licensing policy will not just be applicable to Concor but also to private players. The national transporter had revised the LLF charge for Concor in April last year to a fixed fee of 6 percent linked to the market value of the land. This was set to increase at a rate of 7 percent per annum, factoring in inflation as well in comparison with a variable fee model depending on the volume. After fixing the new LLF at the rate of 6 percent, the ministry of Railways had slapped a land fee of Rs 1,276 crore for 13 terminals, well above Concor’s expectation of Rs 460 crore.
The minister said that the national transporter is expected to handle at least 10 million tonne (MT) more freight traffic by the end of this financial year compared to the pre-COVID level. Till March 9, the Indian Railways handled around 1,137 MT of freight, down 0.17 percent compared to the previous financial year. During the first nine days of March, freight traffic was seen up by 6.75 percent compared to the same time last year.
Regarding the restarting of regular services, the minister said that the Railways will gradually restart services based on the demand coming from passengers. “As of now, 95 percent of suburban trains are operational. Mail and express trains are back to 75 percent of what it was before the pandemic and will be 85 percent within a month. On the other hand, we are handling more freight that what it is during the normal time,” he said.