Kanpur Logistics Park Pvt Ltd, a unit of Pristine Logistics & Infraprojects Ltd, has announced a negative rate of 52 percent in the Ministry of Railways’ first tender thereafter to win the contract for the construction of a Gati Shakti multimodal freight terminal in New Bhaupur near Kanpur Introduction of a new rule for bidding for the development of such facilities on the Indian Railways site.
The 52 per cent negative rate set by Kanpur Logistics Park would mean that the private operator will not take a share of the Terminal Fees (TC) and Terminal Access Fees (TAC) from the Dedicated Freight Corridor Corporation of India Ltd (DFCCIL)/Indian Railways when operating the plant. In addition, the company has offered to pay an amount equal to 52 percent of the TC and TAC to DFCCIL/Indian Railways, officials on the offer said.
The terminal dues and terminal access fees are charged by Indian Railways at its freight sheds/container rail terminals: if the cargo arrives on railway-owned wagons, a TC of Rs. 20 per tonne (for bulk) is charged, and if it arrives on private wagons, a TAC of Rs Charged .6 lakh rupees per rake (for containers) per entry.
For Gati Shakti freight terminals to be built wholly or partially on India Railways premises, the railway will charge terminal fees and terminal access fees similar to those charged at railways goods sheds. These terminal fees and terminal access fees are shared with the Gati Shakti Cargo Terminal Operator (GCTO) according to the percentage mentioned in the tender.
Bidders must indicate the percentage of terminal fees and terminal access fees they wish to claim from India Railways for traffic handled at the terminal, according to the criteria previously used to decide the tenders. The percentage offered must be similar for TC and TAC.
In the first tenders for the Gati Shakti multimodal freight terminals, the contracts were awarded to the bidder who submitted the minimum percentage or claimed the smallest share of TC and TAC from DFCCIL/Indian Railways.
If two or more bidders offer the same percentage share, the lot decides on the award of the contract.
Under the new bid award criteria, a DFCCIL/Indian Railways bidder may retain all TC and TAC without seeking a share in this account. In addition, it can share a percentage of TC and TAC to DFCCIL/Indian Railways from the revenue generated from infrastructure and value-added services provided at the terminal.
To illustrate Kanpur Logistics Park’s offering, the company is not claiming any share from DFCCIL/Indian Railways of the TC of 20 rupees per tonne and a TAC of 1.6 lakh rupees per rake/per terminal – the full TC and TAC will be provided by DFCCIL withheld /Indian train service.
In addition, the company has agreed to share 52 percent of the TC of Rs. 20 per tonne and TAC of Rs. 1.6 lakh per rack/per terminal to DFCCIL/Indian Railways.
New Bhaupur Cargo Terminal Pvt Ltd, the only other bidder to have submitted a price offer, quoted a rate of 52.35 per cent, meaning it will retain 52.35 per cent of the TC and TAC, with the remainder going to DFCCIL/ Indian Railways.
According to railway industry sources, Kanpur Logistics Park has made an aggressive bid to win the Gati Shakti multimodal freight terminal in New Bhaupur in order to stem competition and retain its market share in the Kanpur catchment area.
Pristine Logistics & Infraprojects operates a terminal in Kanpur with a capacity of 1,08,000 TEU (Twenty Foot Equivalent Units), which has a market share of around 75 percent in the region and is one of the company’s largest cash cows. The only other competitor, the state-owned Container Corporation of India Ltd (CONCOR), has the same market share.
The new Bhaupur terminal, to be built on 17.8 hectares of railway land, will run close to the proposed Eastern Dedicated Freight Corridor.
In February of this year, Pristine Logistics and Infraprojects won a contract to build India’s first Gati Shakti Multi Modal Cargo Terminal from DFCCIL in New Rewari by quoting a “NIL” share of terminal access fees, allowing Indian Railways to retain full TAC.
New Rewari is also India’s first terminal to be recognized by DFCCIL for Daily Single/Double Stack Container Train Transport, connecting the National Capital Region of Delhi with the main gateway ports of Mundra and Pipavav.
In at least three recent bids for the Gati Shakti Cargo Terminal, including the proposed bid for the Sankrail Goods Terminal Yard near Kolkata, some 18 km from Howrah, to be built on 120 acres of railway land, all three bidders gave a prize of 99.97 percent, expressing their willingness to leave all TC and TAC to DFCCIL/Indian Railways.
“This resulted in a tie and in such cases, according to the tender document, the bid shall be decided by drawing lots. But many felt it would be a fun way to close the bid,” said an industry source with knowledge of the matter.
This had left Indian Railways in a quandary when deciding on tenders and forced a change in the criteria for awarding bids.