MUMBAI: The Indian Railways have asked firms running container trains to pay a non-refundable fee of Rs25 crores and Rs5 crores, depending upon the type of permit, for roll over of their concession agreements that ends in 2026 and 2027 after a 20-year run.

The renewal of the concession agreement will be for 10 years.

The Ministry of Railways privatised the container train operating sector in 2007, by issuing permits to some 16 firms to ply on the Indian Railways network.

These include state-run Container Corporation of India Ltd (Concor), Adani Logistics Ltd, DP World Rail Logistics Ltd, J M Baxi Ports & Logistics Ltd, Hind Terminals Pvt Ltd, Gateway Distriparks Ltd, Pristine Mega Logistics Pvt Ltd, Pipavav Railway Corporation Ltd, Navkar Corporation Ltd, Central Warehousing Corporation Ltd, CJ Darcl Logistics Ltd, Distribution Logistics Infrastructure Pvt Ltd, Container Rail Road Services Pvt Ltd, India Infrastructure and Logistics pvt Ltd and Sical Multimodal and Rail Transport Ltd.

Some container train operators paid Rs50 crores as license fee for securing rights to run services on a pan India basis, while others bought permits for Rs10 crores to operate on three specified/limited routes.

The concession agreements signed with train operators, including state-run Container Corporation of India Ltd (Concor), the country’s biggest rail hauler of containers, was valid for 20 years.

Following clarifications sought by the container train operators, the Railway Board has said that those looking to renew their concession agreement should “deposit a non-refundable fee which shall be one half of the amount of registration fee paid prior to the execution of the agreement”, an 18 June circular issued by the Indian Railways, said.

“The container train operator should submit the required fee at the time of applying for the extension of the concession agreement,” the Ministry wrote in the circular, seen by ET Infra.

The Commercial Operations Date (COD), according to the Ministry of Railways, is the day falling on the second anniversary of the date of the agreement or in case the date of commercial operations is prior to the date of execution of the agreement, the commercial operations date will be the date of the agreement.

In cases where the commercial operations start before the second anniversary of the agreement, the date on which the first Railway Receipt is generated may be taken as the commercial operations date, the Ministry has clarified.

“For extension of the concession agreement, a request should be submitted by the authorised signatory of the Company and also submit the copy of the first Railway Receipt along with non-refundable registration fee which shall be one half of the amount of registration fee paid prior to the execution of the concession agreement,” the Ministry wrote in the circular, urging the container train operators to clear the outstanding dues of Indian Railways for further necessary action.

The container train operators reckon that the Railway Ministry’s move to levy a license fee to renew the concession agreement will hurt their operations and force some of them to “pack up and exit”.

According to the terms of the concession agreement, the container train operators will have to pay haulage charges on a per trip basis to Indian Railways for hauling their trains as the locomotives and tracks are owned by the Railways. Typically, haulage charges account for as much as 80 percent of the cost of operating a container train.

The Railway Ministry sets the haulage rates for using railway infrastructure that acts as the base rate for all the operators on which they will add their capital and operating costs to arrive at the cost to be levied from the trade.

Already operating under wafer thin margins, the decision to collect a license fee to extend the concession agreement would further hit operations, a container train operator claimed.