New Delhi: A decision taken by the government has caused state-run disinvestment-bound Container Corporation of India (CONCOR) a loss of Rs 1 crore. CONCOR had opened a subsidiary on the former's direction and has now decided to shut it down because it is no longer required. The subsidiary was yet to start a business. In a regulatory filing to the stock exchanges, CONCOR said that it had formed a wholly-owned subsidiary, named CONCOR Last Mile Logistics Limited (CLMLL), in January 2020 on the orders of the Ministry of Railways.
"We would like to inform that the above subsidiary of CONCOR was formed in January 2020 in terms of the orders of the Ministry of Railways regarding initiating the process of creating JV /SPV with equity participation by the Ministry of Railways and other concerned stakeholders Ministries/ Departments of Railway's for development of Goods Sheds as Inter-Modal, Multi Modal Logistics Parks (MMLPs)," said CONCOR in the regulatory filing.
However, afterwards, the Ministry of Railways changed its mind and decided to invite an open offer for the development and management of goods sheds. "… subsequently Railway decided to invite open offer from the Market for development and management of Goods Sheds, as a result, the very purpose of incorporation of CLMLL became redundant and it has been decided to dissolve CONCOR Last Mile Logistics Limited," CONCOR told the bourses.
It added, "CONCOR has invested an amount of Rs 1.00 crore in this subsidiary Company and it was yet to commence its business."
In an official statement released on October 15, 2020, the Ministry of Railways has announced its 'Policy on Development of Goods-sheds at small/road-side stations through Private Investment.' "Aiming at augmenting terminal capacity through private participation by allowing setting up of new goods-shed facilities and developing existing goods-sheds (which Railways are unable to do due to lack of resources) at a larger number of stations, Ministry of Railways has issued a Policy on Development of Goods-sheds at small/road-side stations through Private Investment," the statement had said.
The policy was aimed at allowing private parties to develop goods wharf, loading/unloading facilities, facilities for labour (resting space with shade, drinking water, bathing facilities, etc) approach road, covered shed and other related infrastructure. The facilities were to be created/developed by the private party through its own investment.
Therefore, the decision led to the CONCOR subsidiary becoming redundant just months after it was formed by the Railway PSU.
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