Indian private container trains still weak-Logistics

India's government plans to encourage the private sector to participate in the state-dominated railway freight business, according to The Financial Express of India.

Only three small companies have entered the deal last year and they report a combined share of the business of less than 10 per cent. They are also unhappy with the 10-month delay in executing the contract between themselves and Indian Railways, said the newspaper.

Even a year after the agreement was signed, the project has not taken off the way it was expected to," said an official from Srei Infrastructure Finance Ltd, a leading infrastructure equipment and project lender that has provided INR10 billion (US$260 million) to the project.

Operators say Indian Railways has been increasing haulage charges at regular intervals, which cuts into their margins. Then, the railways decided to ban the private railway movements of iron ore, coal, coke and minerals.

Operators are also worried by the lack of rolling stock and inland container depots (ICDs). Industry sources told The Financial Express that it would take at least two years for the much-touted project to gather momentum.

The ministry had granted licences to private companies in January 2006, for running container trains, a service thus far had been the monopoly of the state-owned Container Corporation of India.