Tuesday, November 10, 2009

Indian Rail Freight And Air Carrier Update

It seems Smart Money is Staying on the Ground
Shipping News Feature

INDIA - East Central Railway (ECR) state they carried about 6.35 million tonne goods during October this year which is a record .They claim that makes 43.43 million tonne goods in the current year mostly bulk products like coal and oil with cement and foodstuffs forming the next most popular commodities.

Indian Railways reported yesterday that they too had increased earnings, up over 16.5% against the same period, October 2008.

The news comes in the same week Blackstone Group, the world’s biggest equity organisation, announced they had acquired 37.5% of Gateway Rail Freight, an Indian rail and multi modal logistics provider and that Berkshire Hathaway were moving in the same direction in the US (see Warren bets the Farm). Gateway Rail have reportedly been growing at 50% per year and will use the incoming funds to set up its third inland container depot (ICD) near Faridabad, besides adding six more trains to its fleet of 17. It also plans to expand its network in Gujarat and Mumbai. They also have plans to develop the land the company owns at Faridabad within the next year when all planning permissions are in place.

Just two months ago Blackstone invested in another Indian freight operation, AllCargo Logistics, the eighth time the group have put money into a subcontinent company. A spokesman said they were particularly interested in the development of logistics as they felt it was a field they were now familiar with.

As indicated here earlier many western investors are looking at the subcontinent with an eye to the future of the logistics market and to rail in particular given the plans to develop infrastructure by the various authorities.

The road and rail sectors are in stark contrast to the air lines where just this week Kingfisher Air have been seeking a £240 million bail out and within the last month Air India have seen 20,000 workers’ go on hunger strike for non payment of wages, the state owned carrier lost a reported £625 million last year, whilst Jet Airways boss called his workers “terrorists” after pilots failed to turn up for work leaving hundreds of flights grounded.