The disinvestment plan of Container Corporation of India (CONCOR) worth ₹12,000 crore has attracted the attention of global majors such as Maersk. However, the process is currently at a standstill due to concerns raised by the railway ministry, CONCOR’s parent organization. According to a report by moneycontrol, the Railways has raised certain issues with the disinvestment and is not enthusiastic about selling the asset.
The strategic sale of CONCOR requires approval from both NITI Aayog and the railways. CONCOR’s parent firm is calling for further decisions to be made before proceeding with the disinvestment, as stated by anonymous sources cited by the website. The ₹12,000 crore disinvestment proposal must receive approval from all the organizations and institutions involved in the process. If the railway ministry, which is the nodal ministry, lacks interest in the sale, it could significantly delay the entire process.
A government official, cited by moneycontrol, has expressed concerns that the current situation makes it challenging to complete the disinvestment within the current financial year. The official explains that without the completion of internal processes, it would be difficult to issue expressions of intent (EOI) for CONCOR. Given the uncertainty surrounding the issuance of EOIs, the prospects of completing the process in FY23-24 are grim.
In the financial year 2023-24, CONCOR is expected to pay land lease charges amounting to ₹450-490 crore. The estimated payout for the previous financial year was ₹450 crore. These figures highlight the financial implications of the delay in the disinvestment process.
The strategic sale of CONCOR, a Navratna firm, received approval from the cabinet in November 2019. The plan involved selling a 30.8% stake in the company and transferring management control to the buyer. To gauge investor interest, the department of Investment and Public Asset Management (DIPAM) conducted roadshows in October of the previous year. Legal advisory services for the process are being provided by L&L Partners, while firms like Deloitte Touche Tohmatsu India and RBSA Valuation Advisors LLP have been roped in by DIPAM to ensure a smooth execution of the plan.
In summary, the disinvestment plan for CONCOR worth ₹12,000 crore has faced obstacles due to concerns raised by the railway ministry. The lack of interest from the nodal ministry could result in significant delays. The completion of internal processes is necessary to issue expressions of intent and move the disinvestment forward. With uncertainties surrounding the issuance of EOIs, completing the process within the current financial year seems unlikely. The delay not only affects the disinvestment timeline but also has financial implications for CONCOR, as it continues to pay land lease charges. The strategic sale of CONCOR was approved by the cabinet in 2019, and various entities, including DIPAM and advisory firms, are involved in facilitating the process.
