The approval 'in principle' was granted to India Infrastructure and Logistics Pvt Ltd (IIL), a joint venture with Hindustan Infrastructure Projects & Engineering Pvt Ltd (HIPE). HIPE is a company controlled by Mr. Rajeev Chandrasekhar.
India's Ministry of Railways issued the approval 'in principle' for a 'Category 1' license conferring rights to run unlimited trains on all India routes, for an initial period of 20 years which is extendable by another 10 years.
Initially the joint venture will concentrate on the Mumbai-Delhi route, where it anticipates offering a market-leading service.
NOL's Group Deputy President, Mr. Cedric Foo said, "India has the attributes and potential to become the next Asian manufacturing hub. What has prevented India from realizing this potential is an under-investment in infrastructure. That is why the Indian Government is seeking private equity participation to hasten the pace of infrastructure development.
"NOL is grateful to the Indian Government for this investment opportunity and is committed to the growth of India," said Mr. Foo, who will be Chairman of IIL. "We have considerable experience operating freight rail services. Our APL subsidiary pioneered double-stack trains in the US in 1984. Although the US investment was sold in 1999, we retain considerable managerial and IT expertise in this business.
"By investing in landside facilities, we will complement and differentiate our liner services in India and at the same time develop a new stream of logistics income for the Group."
"This marks HIPE's first investment in the transportation sector. The transportation sector is an important focus area for us and so is our partnership with NOL," said Mr. Chandrasekhar.
NOL Group Senior Vice President for South Asia, Mr. Kenneth Glenn said, "APL is aiming to tap opportunities to better serve the fast-growing Indian manufacturing sector, by offering seamless end-to-end transportation and logistics services to our customers.
"Land transportation in India is characterized by infrastructure 'chokepoints' and our investment in rail services is part of a larger commitment in developing new landside capabilities to meet our customers' needs for an integrated and seamless liner and logistics service.
"We look forward to the APL brand becoming a visible presence on rail wagons moving across India," Mr. Glenn said.
In February 2005 the Indian Parliament approved a proposal to privatize the country's rail freight services, which have hitherto been controlled by a government-owned monopoly, CONCOR.
