The Hindu Business Line : Major iron ore exporting ports rely more on road connectivity

IT is interesting to note that New Mangalore, Paradip and Haldia would not have emerged as the major iron ore exporting ports but for the road connectivity.

The bulk of the total volumes of ore for exports handled by these ports were brought to the respective quaylines by trucks.

Thus, 100 per cent of the total volume of 5.57 million tonnes of iron ore fines handled by the New Mangalore port arrived by trucks as compared to 60 per cent of the total volume of nine million tonnes of ore at Paradip and nearly 60 per cent of the total of 5.5 million tonnes at Haldia.

Clearly, such a large-scale road movement became imperative in view of constraints in rail movement.

The Railways did not meet the wagon requirement of the iron ore exporters due to several reasons.

First, there was a general scarcity of the wagons vis-à-vis the skyrocketing demand for them from the cross-section of trade and industry, particularly during the peak season ranging from October to March, forcing the Railways to become choosy about wagon allotment and thus to stipulate certain conditions in regard to allotment for ore exports.

One such stipulation was that the cargo inducement at the port has to be adequate for backloading.

The Railways will make a daily allotment of two rakes of wagons for transporting iron ore for exports through a port only if the availability of imported bulk material, for example, coking coal, in the same port is enough to load two rakes a day.

The number of wagons to be moved into the port with exports must match the number of wagons to be required at the port for backloading of imports.

In other words, by enforcing this condition, the Railways sought to cut down on the idle movement of wagons.

Second, the Government's deliberate policy was to accord priority to exports of the value-added products in preference to primary products.

That is to say, the exports of steel products would receive greater priority in wagon allotment than the export of iron ore.

Third, there are many domestic sponge iron and other steel products producers (excluding the integrated steel plants) who set up their units without consulting the Railways and without caring to set up sidings of their own but mounted pressure on the Railways for allotment of wagons to transport ore to their production units.

On several occasions, the Railways had to bow down to their pressure and make allotment of wagons for them.

There is still a fourth reason. The present level of rail connectivity to all the three ports leaves much to be desired.

Fortunately, the Railways is now working on projects to improve the connectivity and these include the construction of the Hassan-Mangalore railway line and doubling of the lines between Cuttack and Paradip and Panskura and Haldia.

The large-scale road movement of ore to various ports for exports brings to the fore several important issues.

First, a much costlier fuel was burnt to transport a much cheaper mineral.

It is a national loss to the economy, particularly at a time when the country is paying through the nose for the high crude price in the world market.

Also, such movement throws up a variety of other problems in the form of road congestion, pollution and the huge wear and tear of the roads.

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