The Hindu Business Line : Rlys hikes freight charges for iron ore exports yet again

Within two months of increasing the congestion surcharge on iron ore traffic, Indian Railways has hiked the surcharge yet again to a whopping 60 per cent per tonne with effect from December 1.

Earlier, the congestion surcharge was at 35 per cent per tonne, which was effected from October 1 — an increase of 14 percentage points over the 21 per cent surcharge level prevailing till September-end.

The 21-per-cent congestion surcharge was imposed on iron ore exporters from April 1, through a notification after the Railway Budget.

The exporters are up in arms against the move. They have represented to the Railway Ministry against the hike and have also written to the Railway Minister, Mr Lalu Prasad.

To hit margins

“The 60 per cent surcharge is likely to hit the margins of iron ore export earnings by about $3-5 per tonne since Chinese buyers have refused to absorb any further hikes,” according to the Federation of Indian Mineral Industries (FIMI) officials.

“We are exploring all possible options and will decide on our next step within the next two to three weeks,” said FIMI officials.

The Railways has actually imposed congestion and busy season surcharge on the exporters through the entire 2007-08 fiscal — just that the levels of surcharge were lower in the first half of the year.

In October, the Railways witnessed a 66 per cent increase in earnings (year-on-year) from iron ore exports, while the loadings went up by 44.85 per cent.

According to a Railways notification, for all iron ore traffic being transported to goods sheds and sidings that serve the ports, a congestion surcharge of 60 per cent would be levied.

Apart from the congestion surcharge, iron ore exporters are also paying busy season surcharge of 7 per cent with effect from October 1, when the Railways had increased the surcharge by one percentage point.

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 2 per cent.

With all these surcharges, for moving one tonne of iron ore on a 500-km distance, exporters now have to pay about Rs 987 compared to the base tariff of Rs 554.70 as announced in the Budget.

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