Public sector Container Corporation of India's monopoly over railway container traffic movement has ended with the railway ministry permitting Pipavav Rail Corporation Ltd to transport containers by rail.

Though private participation had been allowed in container traffic movement quite some time ago, the railway ministry had been sitting on various requests, including PRCL's.

"PRCL has been permitted to operate on 10-11 routes from Pipavav port in Gujarat to all major dry ports in the country, including Tughlakabad in New Delhi," RC Dubey, managing director, PRCL, said.

PRCL is a special purpose vehicle formed in 2001 by the Nikhil Gandhi-promoted Gujarat Pipavav Port Ltd and the railways. Each has a 50 per cent equity in PRCL.

Dubey said for the first year, PRCL planned to enter into a memorandum of understanding with Concor for leasing of flat rakes used for carrying containers. "During the first year, we will need around 10 rakes," Dubey said. Concor, however, may not be open to leasing its wagons and warehousing facilities.

"The question of leasing wagons to Concor's competitor does not arise. Also, Concor will get a much higher rate of return by using the wagons for its own operations," a company executive said.

PRCL might float a joint venture with a wagon manufacturer to make rakes, Dubey said. "In three-four years, we intend to acquire about 2,000 rakes ourselves, which will require an investment of about Rs 400 crore (Rs 4 billion)," he added. Dubey said transporting its own containers would help PRCL cut costs by 22 per cent.

"We will now be charged for the services directly by the railways rather than Concor, which charges higher rates," he said.

He said the port would also be able to attract more traffic over a period of time.