Cabinet approves merger of CRWC with holding company Central Warehousing Corporation

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the merger of Central Railside Warehouse Company Ltd (CRWC) with its holding enterprise Central Warehousing Corporation (CWC).

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

The decision to merge and transfer all assets, liabilities, rights and obligations of CRWC with CWC is another step towards the Prime Minister's call for 'Minimum Government Maximum Governance', promoting ease of doing business and bringing private sector efficiencies in public sector undertakings (PSUs), the government said in a release.

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

The merger will facilitate setting up of at least 50 more railside warehouses near goods-shed locations, which 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.

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CWC, a profit making PSU, had formed separate subsidiary company CRWC on July 10, 2007 to plan, develop, promote, acquire and operate RWCs, terminals and multimodal logistics hubs on land leased from Indian Railways or acquired otherwise.

CRWC has 50 employees and a staff of 48 outsourced personnel. Currently, it is operating 20 railside warehouses across the country. As on March 31, 2020, its net worth stood at Rs 137.94 crore.

"CRWC developed specialisation, 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 Ministry of Railways, its pace of growth was not as expected," the government said.

As CWC is the sole shareholder of CRWC and all the assets, liabilities, rights and obligations will be transferred to CWC, there will be no financial loss to either, and the merger 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 said.

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