Nov 22, 2006

ITC, HLL to enter into JVs with Railways

FMCG majors ITC and HLL are in talks with the Indian Railways to forge independent JVs with it for setting up warehouses at the surplus land around railway stations, guaranteeing a certain freight traffic to the railways in return. The railways will set up SPVs which will enter into joint ventures with FMCG majors as well as other companies.
ITC’s chief executive of the company’s agri-business division S Sivakumar says: “It would be a low-cost model for transportation and storage. We have shared our ideas with the railways for using their network to connect farm centres with consumption markets.” Mr Sivakumar added that a pan-India player like ITC would like to set up storage centres across the country.

An email sent to HLL on the matter did not elicit a response. The company’s proposal, say railway ministry sources, is being finalised. “Things are on the fast track. We hope to enter into a JV with HLL soon as its proposal is sound,’’ said a railway official.

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