A change in attitude
Indian Railways' plan to set up the Logistics Corporation of India - a proposed one-stop solution for all its logistics needs - may soon get the nod of the Union cabinet.
Logistics focuses on managing the transfer of goods from point of origin to point of consumption.
Experts argue that the Rs 9,000-crore logistics industry in India, which is currently growing at over 5 per cent, holds tremendous potential and the Railways has much to gain from this enterprise.
However, the ambition of the Railways to graduate from a bulk commodity supplier to a full logistics provider, while a step in the right direction, demands a change in the attitude of the national transporter when it comes to doing business with the private sector.
Allow some room for flexibility and transparency in policymaking and the private players will be keen to participate as partners, especially when a mere 1 per cent of the logistics industry currently falls in the organised sector.
The proposal is to start the Logistics Corporation as a joint venture or a public private partnership across 28 cities where the traffic volume is more than two million tonnes a year.
The logistics company will use a mixed network of roads and rail.
The majority share will be held by the private player, who will develop warehouses and take care of the entire operations. The Railways' contribution to the equity will be its land resources in strategic areas in the 28 cities.
Text: Anusha Soni, Business Standard
Image Courtesy: Reuters