Railways to lease out abandoned buildings to ecommerce companies

By

Maverick Martins

Published
Oct 24, 2016

Ecommerce companies such as Flipkart, Amazon and Snapdeal may soon get to set up warehouses and pickup points at railway stations, according to a report in the Economic Times.

A senior official of the Railway Board said the railway ministry is working on a scheme to lease out its abandoned buildings and spaces near railway stations to etailers.

Meanwhile, the non-fare revenue cell of the Board is in talks with the ecommerce companies in this regard, the official said.

The move is seen helping the railways become an end-to-end logistics provider and monetise its real estate, while also reducing the delivery time for ecommerce companies as their warehouses and pickup points are mostly on the periphery of big cities.

“We want to be end-to-end logistics providers. Presently, we see a huge gap in the market where ecommerce companies are unable to get spaces in the city because the cost is too high,” the official, who did not wish to be named, told Economic Times.

“We are offering them our abandoned building and other spaces to set up warehouses and pickup points, that too at a cost-effective price", he added.

According to the official, EY and BCG have been roped in as consultants to work on the proposed scheme, which is expected to be announced soon.

“Railways offer a cost-effective solution to ecommerce by allowing them to set up pickup points at stations. With this, railways would also become a part of the growing logistics supply chain of white goods, hence getting additional revenues,” said Jaijit Bhattacharya, partner, KPMG. “It's a win-win situation for both railways and etailers.”

The ministry will also be offering space near rail side in smaller cities so that etailers, along with other new-age courier companies, can set up their hubs.