New Delhi: Taking another step towards implementing the idea of "Minimum Government Maximum Governance" given by Prime Minister Narendra Modi, promoting ease of doing business and bringing private sector efficiencies in Public Sector Undertakings, the Union Cabinet has approved the merger and transfer all assets, liabilities, rights and obligations of Central Railside Warehouse Company Limited (CRWC), with its holding enterprise Central Warehousing Corporation (CWC), said an official statement released on Wednesday. The merger will unify similar functions of both the companies (ie, warehousing, handling, transportation) through a single administration to promote efficiency, optimum capacity utilisation, transparency and accountability, and will ensure financial savings and leverage railway sidings for new warehousing capacities.
It is estimated that the management expenditure of Railside Warehouse Complexes (RWCs) will come down by Rs 5 crore due to savings in the corporate office rent, the salary of employees, and other administrative costs. The capacity utilisation of RWCs will also improve as there will be potential for CWC to store commodities other than cement, fertilizer, sugar, salt and soda, which are being stored presently. The merger will facilitate the setting up of at least 50 more Railside warehouses near the goods-shed locations. This is likely to generate employment opportunities equivalent to 36,500 man-days for skilled workers and 9,12,500 man-days for unskilled workers. The merger is expected to be completed within eight months of the date of the decision.
CWC is a Miniratna PSU set up in 1957 to provide for incorporation and regulation of warehousing corporations for the purpose of warehousing of agriculture produce and certain other commodities notified by the Central government and for matters connected therewith. CWC is a profit-making PSU with an authorised capital of Rs 100 crore and a paid-up capital of Rs 68.02 crore. CWC formed a separate subsidiary company named 'Central Railside Warehouse Company Ltd' (CRWC) on July 10, 2007, to plan, develop, promote, acquire and operate the railside warehousing complexes or terminals or multimodal logistics hubs on the land leased from Railways or acquired otherwise. CRWC is a lean organisation with 50 employees and a staff of 48 outsourced personnel. Presently, it is operating 20 railside warehouses across the country.
As on March 31, 2020, the net worth (paid-up capital plus free reserves) of the company is Rs 137.94 crore. CRWC developed specialisation, expertise and goodwill in the development and operation of RWCs but due to shortage of capital and also due to some of the restrictive clauses in its MoU with the Ministry of Railways, its pace of growth was not as expected.
As CWC is the sole shareholder of CRWC and all the assets and liabilities and rights and obligations will be transferred to CWC, there will be no financial loss to either and the merger will bring synergy, said the statement. A separate division with the name 'RWC Division' will be created by CWC for handling operations and marketing of RWCs.
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