New Delhi: The Union Cabinet today approved the merger 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 Cabinet approved transfer all assets, liabilities, rights and obligations of CRWC following the merger.
The merger is expected to be completed within 8 months of the date of decision. It 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, a cabinet note stated.
It is estimated the merger will:
- unify the similar functions of both the companies such as warehousing, handling, and transportation
- bring down the management expenditure of Railside Warehouse Complexes by Rs. 5 crore due to savings in the corporate office rent, salary of employees, and other administrative costs
- 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.
- improve the capacity utilization of RWCs as there will be potential for CWC to store commodities other than commodities of cement, fertilizer, sugar, salt and soda being stored presently.
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 there with.
CWC is a profit making Public Sector Enterprise (PSE) with authorized capital of Rs.100 crore and paid up capital of Rs. 68.02 crore. CWC formed a separate subsidiary company named ‘Central Railside Warehouse Company Ltd.’ (CRWC) 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 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 Cabinet note stated.
– global bihari bureau
