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Thursday, September 16, 2021

Congress questions govt disinvestment in CONCOR

Congress spokesperson Gourav Vallabh asked the government to explain the rationale behind its decision to cull its stake in the public sector undertaking which, he said, has been consistently profitable over the last 10 years.

By: Express News Service | Delhi |
September 14, 2021 8:59:33 am
The spokesperson asked why the government, having decided on disinvestment, is considering changing land licensing fees from the existing 6% to 2%-3% and lease period from 5 years to 35 years. (File)

The Congress Monday questioned the Centre’s proposed disinvestment in the Container Corporation of India Ltd (CONCOR), a Railways PSU and Navratna company. It accused the Railways of changing the terms of leasing its land to CONCOR in a way that would put the company at a financial disadvantage and eventually affect its market value.

Congress spokesperson Gourav Vallabh asked the government to explain the rationale behind its decision to cull its stake in the public sector undertaking which, he said, has been consistently profitable over the last 10 years.

“Why a Navratna company that is of strategic importance, consistently generating a profit and declaring average dividends of Rs 365 crore per year in the last four years is decided for disinvestment?” asked Vallabh at an All India Congress Committee press conference.

CONCOR, he said, is now the undisputed market leader having the largest network of 60 Inland container depots.

The Narendra Modi government, he said, has given its nod to sell 30.8% out of its 54.8% holding in CONCOR and management control to strategic buyers.

“CONCOR has over 60 ICDs, and 24 are situated on the railway land. The Railway Board last year notified a Land Licensing Fees (LLF) regime for industrial use of its land and extended the same to CONCOR. The LLF being charged by the transporter now is 6% of land value in the first year of license; the rate will increase at a rate of 7% annually to factor in inflation. Now the Modi government is considering a change in the lease policy for industrial use of railway land.”

“A change that will bring LLF to 2%-3% from the current level of 6%. This policy may extend the land lease period from 5 years to 35 years or more. In other words, the Government is considering the proposal to lease Railway land for 35 years by receiving an upfront 99% of lease rentals. For this, CONCOR will require about Rs. 3,500 crore debts after utilizing Rs 2,500 Crores of cash reserves,” he said.

The Congress posed many questions to the government. The spokesperson asked why the government, having decided on disinvestment, is considering changing land licensing fees from the existing 6% to 2%-3% and lease period from 5 years to 35 years.

“Is the proposal to reduce LLF an indirect way to hand over developed Government land to private parties for the long term,” he asked. “How can railway land acquired from farmers of our country at a concessional rate and in many cases, farmers donated this land free of cost to railways for expansion, maintenance, and development of railway infrastructure in our country can be handed over to a private party for commercial use in a backdoor arrangement,” he added.

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