CONCOR’s land licensing fee outgo set to rise to Rs. 500 crores this fiscal.

Container Corporation of India Ltd (CONCOR) said the land licensing fee (LLF) it pays for running terminals on Indian Railways land will rise by about Rs. 100 crores to some Rs. 500 crores for the fiscal year ending March 2024 after the rail hauler finalised the industrial land rate for its flagship facility at Tughlakhabad near Delhi that was pending for long.

Beginning 1 April 2020, the Railway Ministry decided to charge the annual LLF from CONCOR at the rate of 6 percent of the industrial land value per acre where the terminal is located, which will escalate by 7 percent annually.

Till FY20, the LLF for the land leased from Indian Railways for running terminals and inland container depots (ICDs) was paid by CONCOR on a per container basis that rose annually in tandem with the percentage increase in net profit of the company. In FY20, the LLF was billed at the rate of Rs1,175 per twenty-foot equivalent unit (TEU).In FY23, CONCOR paid Rs. 392.36 crores to Indian Railways for running 26 terminals on land leased from the national transporter, 15.64 percent lower than the Rs465.11 crore incurred in the previous year as the rail hauler of boxes continue to follow the old regime without migrating to the new land licensing policy cleared by the Union Cabinet in September 2022.

Except for the Tughlakhabad terminal, the industrial land value of all the other facilities spread across different states have been worked out by the Railway Ministry and CONCOR based on the land revenue rates set by the respective state revenue authorities for a circle.

The Railway Ministry and CONCOR, though, faced some “problems” in finalising the land revenue rate for the Tughlakhabad terminal per the Delhi revenue authorities.

“The Delhi government did some flip-flops in rates, because of COVID they reduced the rates and after that they increased it. All these things kept affecting the calculation of LLF,” Chairman and Managing Director V Kalyana Rama told analysts during the earnings call on 11 August after declaring the Company’s first quarter results.

The land revenue rate for the Tughlakhabad terminal, spread over 195 acres in the heart of Delhi, was under discussion. “Finally, after negotiations, what we have ended up with is Rs. 100 crores more than what we have paid in the last financial year,” said Manoj Dubey, Finance Director at CONCOR.

ET