The new land licensing policy formulated by the Ministry of Railways will soon get a Cabinet nod, that could pave the way for the privatisation for railways PSU Concor, a government source told.
“We have been able to resolve all differences and the revised policy is ready. It will be taken up by the cabinet in the next 2-3 weeks. We aim to invite bids for privatisation of Concor by November”, a source told.
Reported earlier that, the Finance Ministry had made suggestions to the Cabinet Secretary led panel to significantly ease land licensing norms to sweeten the stake sale process.
Finance Ministry has suggested halving the land license fee (LLF) from 6% to 3% and a longer timeframe for the land lease to attract potential buyers.
“We have a coherent policy in place now. Interested investors will get clarity on the long-term land lease policy, what happens to the pre-2005 lease etc. We now have a larger sectoral policy for container freight stations”, the source said.
Almost 40% of Concor container freight stations are running on land leased from Indian Railways at concessional market rates. Till March, the land license fee for the lease was paid by Concall at the rate of Rs 1,175 per loaded twenty-foot equivalent unit (TEU). The concessional market value of Indian Railways land leased to Concall, according to a calculation based on February 2005 Railway Biard letter, is about Rs 7500 crore. Indian Railways had proposed a land licensing fee of 6% for Concor and proposed to raise it to 7% annually.
The government plans to privatize 30.8% in Concor and the interested bidders had raised concerns over the steep hike in land license fee would hit profitability for a new buyer depressing interest in the stake sale process.