Container Train Operators in India: Problems and Prospects

Abstract

In India, railways are under the control of the government which is the sole provider of the infrastructure, operations and regulatory functions. Private participation, though very limited, was largely in the domain of infrastructure creation. In January 2006, in a landmark initiative to introduce competition in the container operations segment, the Ministry of Railways allowed the entry of private and public sector operators to obtain licences for running container trains on the Indian Railways (IR) network. Until then, the Container Corporation of India, a subsidiary of IR, was the monopoly operator of container trains in India. This initiative was the first significant move of its kind where private parties were allowed to make entry in the domain of railway operations with direct customer interfacing. The response to the policy was good and 15 new entrants obtained licences to run container trains. Due to lack of clarity or inconsistency in matters pertaining to haulage charges, maintenance of wagons, transit guarantees from IR and terminal access charges, operators started feeling skeptical about the viability of the business. This paper examines the current policy environment from the point of view of business viability for 15 new Container Train Operators and brings out issues related to licensing, pricing, terminals, maintenance, and service levels. Keywords: Indian Railways, Container Train Operators, Container Corporation of India, Policy Issues for Container Transport