Cabinet approves merger of Central Railside Warehouse, Central Warehousing Corporation

NEW DELHI, 24 June 2021: Taking another step towards implementing the direction of “Minimum Government Maximum Governance” given by Prime Minister, promoting ease of doing business and bringing private sector efficiencies in Public Sector Undertakings.

The Union Cabinet chaired by Prime Minister Narendra Modi has approved to merge and transfer of all assets, liabilities, rights, and obligations of ‘Central Railside Warehouse Company Limited (CRWC), a Mini-Ratna Category-II Central Public Sector Enterprises (CPSE) incorporated under the Companies Act, 1956 in 2007 with its holding enterprise ‘Central Warehousing Corporation’ (CWC).

The merger will unify similar functions of both the companies (i.e., 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.

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

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.

The merger will facilitate the 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 man-days for skilled workers and 9,12,500 man-days for unskilled workers. The merger is expected to be completed within 8 months of the date of the decision.

CWC is a Mini-Ratna Category-I 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 therewith.

CWC is a profit-making Public Sector Enterprise (PSE) with an authorized capital of INR 100 crore and paid-up capital of INR 68.02 crore. The company formed a separate subsidiary company named ‘Central Railside Warehouse Company Ltd.’ (CRWC) on 10 July 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 a staff of 48 outsourced personnel. Presently, it is operating 20 Railside Warehouses across the country. As of 31st March 2020, the net worth (paid-up capital plus free reserves) of the company is INR 137.94 crore. The company developed specialization, expertise, and goodwill in the 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.

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