The Container Corporation of India Ltd (CONCOR) has opted to maintain its current land lease agreements with Indian Railways, forgoing the recently introduced liberal licensing policy. This policy, approved by the Union Cabinet, offers reduced lease charges of 1.5% of the market value of the land, compared to the existing 6% with annual escalation.

To switch to the new regime, CONCOR would have to make a bid for the 26 terminals it operates on railway land. Despite having the right of first refusal if they are not the highest bidder, this introduces potential competition and uncertainties. Chairman and Managing Director V Kalyana Rama expressed concern over the variables and risks in the bidding process, including terminal charges for rail car traffic and terminal access charges for non-rail car traffic. These factors can result in higher operating costs and negatively impact margins.

Currently, CONCOR pays around Rs 380-390 crore annually in land lease charges. By sticking to existing policies, they want to avoid the complications and potential financial pressures associated with the new regime. The decision to continue with the current rental terms will be re-evaluated as they closely monitor the implications of the new policy.