CONCOR Abandons Plan for New Land Lease Regime for Existing Terminals
Container Corporation of India Ltd (CONCOR) has made the significant decision to abandon its plan to transition existing terminals to the Gati Shakti Cargo Terminal (GCT) policy. This policy, which was initially expected to be adopted for the company’s terminals operating on Indian Railways land, will now only apply to new greenfield terminals. The reversal has come after CONCOR raised concerns about the uncertainty and risks associated with shifting its brownfield terminals, especially high-traffic locations such as the Tughlakhabad inland container depot.
CONCOR’s Chairman and Managing Director, Sanjay Swarup, confirmed this change in strategy, acknowledging the complexity and potential operational disruptions involved in migrating existing terminals to the GCT regime. Although the Gati Shakti policy would have been an attractive option for new terminals, offering a significant reduction in land license fees (LLF) from 6% to 1.5%, the potential operational complications for existing terminals made the transition unfeasible. In May 2024, CONCOR had shown interest in applying the Gati Shakti policy to its Tughlakhabad terminal, anticipating a reduction of around ₹120 crore annually in LLF. The GCT policy, which promises a lower LLF, was seen as a way to reduce operational costs and increase competitiveness for the company. However, after careful consideration, the company determined that the process of migrating existing terminals would entail too many uncertainties, particularly around the tendering process and operational coordination, especially for terminals with high volumes of traffic.
For the fiscal year 2024 (FY24), CONCOR paid a total of ₹424 crore in land license fees to the Ministry of Railways for 26 terminals across India, with the bulk of that amount — ₹360 crore — dedicated to the Tughlakhabad terminal alone. While the Gati Shakti policy promised significant cost savings for the company, the potential complications of implementing the policy at busy terminals like Tughlakhabad were deemed too high. The introduction of common user facilities as part of the GCT policy also raised concerns about logistical challenges, with container train operators warning that the policy could lead to chaos due to increased control by Indian Railways and a lack of coordination among operators at these terminals. Despite this setback for the existing terminals, CONCOR remains committed to advancing with the Gati Shakti policy for new greenfield projects. The company is already moving forward with the development of new terminals in Mandalgarh, Rajasthan, and near Haridwar, where land is being acquired for expansion. These projects will comply with the GCT policy, providing CONCOR with an opportunity to reduce costs and streamline operations at newly established locations.
This decision to abandon the transition for existing terminals highlights the challenges of implementing large-scale policy changes in a fast-evolving sector like logistics. As CONCOR continues its expansion efforts and explores new territories for its terminals, the company is prioritising operational efficiency and risk management, while navigating the complexities of the broader logistics and container transport landscape. For the time being, the focus will remain on the development of new greenfield terminals, where the company can integrate the Gati Shakti policy from the outset. The outcome of these projects will play a significant role in shaping CONCOR’s future growth and its role within the broader Indian logistics network.
