India’s biggest rail hauler of containers is replicating the JV model adopted at its Inland Container Depot (ICD) facility at Dadri in Uttar Pradesh some two decades ago to boost volumes at Kathuwas as competition hots up in the northern region, trade sources said.
Kathuwas is CONCOR’s biggest ICD in the northern region with a capacity to handle some 1 million twenty-foot equivalent units (TEUs) a year.
The MMLP at Kathuwas – the first to be connected to the dedicated freight corridor for running double stack container trains – was handling some 7 lakhs twenty-foot equivalent units a year since starting operations in 2016 till CONCOR’s Dadri ICD was connected to the DFC about a year ago.
In FY24, the Kathuwas MMLP handled 4.23 lakh TEUs from 6.93 lakh TEUs in FY23. Apart from its own customers, the Dadri facility now serves the Moradabad and Kanpur terminals of CONCOR. Previously, containers originating from or destined for Moradabad and Kanpur terminals were first hauled to Kathuwas and from there to Dadri but now goes directly to Dadri.
“Many customers have shifted to the Dadri terminal due to the proximity, faster transit time and services available at the facility. Besides, Kathuwas MMLP is facing tough competition from private players operating in the northern region,” said a trade source.
The private facilities include the ICDs at Pali and Patli run by Adani Logistics, Gateway Distriparks ICD at Garhi Harsaru (handles the highest volume in the catchment area), and other private terminals at Rewari and Bawal.
Kathuwas MMLP is spread over 283 acres which is “totally unutilised”, and the reason why it is now being monetised by CONCOR to shore up volumes by partnering with container lines and port terminal operators having dedicated cargo.
Kathuwas MMLP is a critical asset for CONCOR and the double stack movement from northern India to Mundra/Pipavav ports has resulted in cost savings of 30-40 percent which are passed on to the customers. It has also reduced the transit times on this sector to 32-34 hours.
Some of the potential partners, including officials from PSA International have visited Kathuwas MMLP, sources said.
Each of the three CFS’s planned at Kathuwas MMLP will be spread over 10-12 acres and the JV agreement will be for an initial period of 30 years, which can be extended by a suitable period on mutually agreed terms, according to the tender.
If the lease is not extended, the infrastructure created by the Joint Venture Company (JVC) will be transferred to CONCOR.
The Customs Department has set a minimum land requirement of 2 hectares (4.942 acres/20,000 sq metres) for developing a CFS.
The initial project cost (taking the minimum area required for a CFS as 5 acres) is estimated to be Rs21 crores. Out of the total proposed CAPEX of Rs21 crores, one-third will be arranged through equity and two-third through debt. CONCOR said it will not invest more than Rs 5 crores in the equity of each JVC.
At the Dadri ICD, CONCOR has formed JVCs separately with A P M Terminals (the container terminal operating unit of A P Moller – Maersk A/S), CMA CGM, AllCargo Logistics and Transworld Terminals. In each of these JVC’s, CONCOR holds a 49 percent stake while the majority stake is held by the private partners.
This structure is likely to be adopted for the container freight station JVCs at Kathuwas.
The MMLP at Kathuwas caters to a region with high industrial activity including Gurgaon, Manesar, Rewari, Jhajjar in Haryana and Alwar and Bhiwadi in Rajasthan. The terminal is connected to Rewari through a 3-lane road which links the state highway (Kund-Behror Road) as well as Rewari-Narnaul Road.
Rajasthan State Industrial Development and Investment Corporation (RIICO) has developed seven industrial areas in and around Neemrana for Japanese entrepreneurs and an exclusive Export Promotion Industrial Park for automobile, engineering, textile and ceramic based industries.
According to the tender, CONCOR will assist the JVC in securing the notification for CFS from the concerned authorities. Till such time the notification is obtained, the bidder can carry out the Customs clearance at MMLP Kathuwas and a separate account of the TEU’s handled during such period will be maintained by CONCOR.
