Cabinet Approves CRWC Merger with Central Warehousing Corporation, Auto News, ET Auto
New Delhi: Taking a further step towards private sector efficiency in public sector enterprises, the Union Cabinet on Wednesday approved the merger and transfer of all assets, liabilities, rights and obligations of the “Central Railside”. Warehouse Company Limited “(CRWC) with its holding company” Central Warehousing Corporation (CWC).
The merger is expected to be completed within eight months of the date of the decision and it will unify similar functions of the two companies in terms of warehousing, handling and transportation through a single administration to promote efficiency, optimal use. capacity, transparency, accountability, ensure financial savings and take advantage of railway sidings for new storage capacities.
It is estimated that the management expenses of the Railway Warehouse Complexes (RWC) will decrease by Rs 5 crore due to the savings in head office rent, employee salaries and other administrative costs.
The capacity utilization of RWCs will also improve as there will be potential for CWCs to store products other than the currently stored cement, fertilizer, sugar, salt and soda products.
The merger will facilitate the establishment of at least 50 additional Railside warehouses near the freight shed locations. This is likely to generate employment opportunities equivalent to 36,500 man-days for skilled workers and 912,500 man-days for unskilled workers.
The CWC is a Mini-Ratna Category-I CPSE established in 1957 to provide for the incorporation and regulation of warehousing companies for the purpose of warehousing agricultural produce and certain other commodities notified by the central government and for matters which relate to it.
The CWC is a for-profit public sector enterprise (ESP) with authorized capital of Rs 100 crore and paid-up capital of Rs 68.02 crore. The CWC has formed a separate subsidiary called “Central Railside Warehouse Company Ltd.”. (CRWC) on July 10, 2007 to plan, develop, promote, acquire and operate warehouse complexes or railway terminals or multimodal logistics centers on land leased to railways or otherwise acquired.
However, CRWC is a Mini-Ratna Category-II of Central Public Sector Enterprises (CPSE) incorporated under the Companies Act 1956 in 2007. CRWC is a lean organization with 50 employees and 48 cents staff. -treaters.
Currently, CRWC operates 20 rail warehouses across the country. As of March 31 of last year, the net worth (paid-up capital plus free reserves) of the company is Rs 137.94 crore.
The CRWC has developed specialization, expertise and goodwill in the development and operation of RWCs, but due to lack of capital and also due to some of the restrictive covenants in its MoU with the Ministry of Railways iron, its growth rate has not been as expected.
Since CWC is the sole shareholder of CRWC and all assets, liabilities and rights and obligations will be transferred to CWC, there will be no financial loss for either, but it will bring synergy.
A separate division known as the “RWC Division” will be established by CWC for processing and marketing of RWCs.