The Hindu Business Line : Rlys hikes freight, congestion charge for iron ore exporters

Extra charges
Congestion surcharge increased to 35% from 21%.
Busy season surcharge of 7% imposed from October1.
Terminal charges of Rs 40 per tonne per terminal imposed till March 31, 2008.

Mamuni Das

New Delhi, Oct 21 Indian Railways has hiked freight charges for iron ore for the second time this fiscal by about 15 per cent through various surcharges with effect from October 1. If the exporters do not pass on this hike to their buyers, they would have to take a hit on their own margins.

For all iron ore traffic being transported to goods sheds and sidings that serve the ports, Railways has increased congestion surcharge to 35 per cent from 21 per cent.

The 21-per-cent congestion surcharge was imposed on iron ore exporters from April 1 this year after the Railway Budget.

Railways has also imposed a busy season surcharge of seven per cent on iron ore for exports with effect from October 1. From April 1 to September 30, iron ore exporters had to pay a six per cent busy season surcharge.

As a result, Railways imposed congestion and busy season surcharges on the iron ore exporters through the entire 2007-08 fiscal — just that the surcharge levels were relatively lower for the first half year period (April 1-September 30).

Moreover, a terminal charge of Rs 40 per tonne of has been imposed on iron ore till March 31, 2008, apart from a development charge of two per cent.

Because of these various surcharges, all of which were imposed through notices issued after the Railway Budget, iron ore exporters would have to pay almost 52 per cent higher charges than the base tariff rates announced in the Railway budget for a distance of 500 km.

For moving one tonne of iron ore over 500 km, iron ore exporters would be required to pay about Rs 844.25 now compared to the base tariff of Rs 554.7 as announced in the budget.

The average railway lead (distance) for iron ore exports from mines to ports is usually about 450-500 km.

Apart from iron ore for exports, Railways has imposed the busy season surcharge of six per cent on movement of coal and coke; and seven per cent on all other commodities for the entire second half of the financial year.

Additionally, a terminal charge of Rs 10 per tonne per each loading or unloading at Railway owned terminal has been imposed on all goods traffic.

The container operators, who have already been seeking lower haulage charges, have been spared of both the terminal and busy season surcharge.