Cabinet okays merger of Central Railside Warehouse Company with Central Warehousing Corporation
A Central Warehousing Corporation FacilityCWC (File photo)

Cabinet okays merger of Central Railside Warehouse Company with Central Warehousing Corporation

New Delhi, June 23, 2021

The Union Cabinet today approved a proposal to merge and transfer all assets, liabilities, rights and obligations of Central Railside Warehouse Company Limited (CRWC) with its holding enterprise Central Warehousing Corporation (CWC).

An official press release said the decision was another step towards implementing the direction of “Minimum Government Maximum Governance” given by Prime Minister Narendra Modi, promoting ease of doing business and bringing private sector efficiencies in public sector undertakings (PSUs).

The merger will unify similar functions of both the companies (warehousing, handling, transportation) through a single administration to promote efficiency, optimum capacity utilization, transparency, accountability, ensure financial savings and leverage railway siding for new warehousing capacities, the release said.

It is estimated that management expenditure of Railside Warehouse Complexes (RWCs) will come down by Rs. 5 crore due to savings in the corporate office rent, salary of employees, and other administrative costs.

The release said the capacity utilization of RWCs will also improve as there will be potential for CWC to store commodities other than commodities of cement, fertilizer, sugar, salt and soda being stored presently.

According to it, the merger will facilitate setting up of at least 50 more railside warehouses near the goods-shed locations. This is likely to generate employment opportunities equivalent to 36,500 mandays for skilled workers and 9,12,500 mandays for unskilled workers. The merger is expected to be completed within 8 months of the date of decision, it said.

CWC is a Mini-Ratna Category-I Central public sector enterprise (CPSE)set up in 1957 to provide for incorporation and regulation of Warehousing Corporations for the purpose of warehousing of agriculture produce and certain other commodities notified by the Central Government and for matters connected there with. CWC is a profit making company with authorized capital of Rs. 100 crore and paid up capital of Rs. 68.02 crore.

CWC formed CRWC as a separate subsidiary company on July 10, 2007 to plan, develop, promote, acquire and operate Railside Warehousing Complexes / Terminals / Multimodal Logistics Hubs on land leased from Railways or acquired otherwise.

CRWC is a lean organization with 50 employees and staff of 48 outsourced personnel. Presently, it is operating 20 railside warehouses across the country. As on 31st March 2020, the net worth (paid up capital plus free reserves) of the company is Rs. 137.94 crore. CRWC developed specialization, expertise and goodwill in development and operation of RWCs but due to shortage of capital and also due to some of the restrictive clauses in its MoU with the Ministry of Railways, its pace of growth was not as expected.

"As CWC is the sole shareholder of CRWC and all the assets and liabilities and rights and obligations will be transferred to CWC, there will be no financial loss to either instead it will bring synergy. A separate division with the name ‘RWC Division’ will be created by CWC for handling operations and marketing of RWCs," the release added.

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