‘Railways should work on capacity & investment’
“There is a need to invest in development of infrastructure assets and network connecting the manufacturing and trading cargo hubs. Indian Railways has been unfair to this sector,” says Sachin Bhanushali, Chief Executive Officer, GatewayRail in conversati
The haulage charge has been increased nine times since deregulation in 2006 resulting into 50-122 percent increase The success of the rail freight sector will depend on consistent policy environment to be created by Indian Railways. This will help indian economy to unlock the huge potential of this sector
First of all, congratulations for taking over as the CEO, GatewayRail. As the new CEO, what would be your prime focus to strengthen the services and business of Gateway Rail in India?
Thank you for your good wishes. GatewayRail has been able to demonstrate that by steady and careful investment in cargo terminals at strategic locations and by providing consistent services, it is possible to build business even in a fiercely competitive environment.
The company will continue to focus on ‘customer oriented’ and ‘reliable’ logistics service to its customers. We would be keen to grow in the domestic trade if Indian Railways can create conducive environment for this purpose.
What would be your recommendations for the greater interest of the logistics industry and the country’s economy as a whole?
India has to invest in development of infrastructure assets and network connecting the manufacturing and trading cargo hubs. Alliances amongst operators will also be able to bring in huge efficiencies in the logistics sector which at present is fragmented and fiercely competitive.
Steep hike in haulage charges of 25 – 41 per cent, plus congestion surcharge of 10 per cent for rail traffic originating at all ports have been announced. How does it affect your cost to customers?
Rail haulage charges constitute 75 to 80 per cent of our operating costs. The sector (both operators and customers) cannot take an increase of 25 to 41 per cent in its cost. Indian Railways has been unfair to this sector. The haulage charges have been increased nine times since deregulation in 2006 resulting into 50 per cent to 122 per cent increase in the haulage charges vis-à-vis five increases in railway freight resulting into 48 per cent cumulative increase.
The heavy weight categories have become disproportionately more expensive resulting into very high transaction cost to the ultimate customer. This is likely to have two impacts. Firstly, some business many shift from Inland Container Depots (ICD) to port side Container Freight Stations (CFS) and some businesses will become uncompetitive in the fiercely competitive international market.
This issue needs to be addressed and corrected by Indian Railways on top priority. A partial and temporary roll back announced by Indian Railways will not help address the core issue.
What kind of changes can the users of GatewayRail in India expect from the new CEO in the days to come?
I have been associated with Gateway Rail enterprise as its Founder President, right since the inception of the idea. We follow collective consensus in all our decision making processes under the guid- ance of the Board, particularly the Managing Director. I am sure that the GatewayRail team will deliver the promised consistent and reliable service to its customers as well as grow its footprint and market share.
How do you see 2015 shaping up for the rail freight sector?
Indian Railways need to address two issues as top priority; capacity (both network and rolling stock) and attract private investment through Foreign Direct Investment (FDI) and Public Private Partnership (PPP) by demonstrating investor friendly demeanor. The success of the rail freight sector will also depend on consistent and reasonable policy environment to be created by Indian Railways. This will help Indian economy to unlock the huge potential of this sector.