The Hindu Business Line : Rlys may review priority status for sponge, pig iron producers

Kolkata, Oct. 21 Reduced loading of iron ore by sponge iron and pig iron producers (known in Railways parlance as Priority C and Priority D customers in the matter of rake allotment) has set the Railways mulling if these customers should continue to be accorded priority status for rake allotment.

There are around 50 Priority C customers and around 100 Priority D customers and the majority of them are based in Chhattisgarh, the others being spread across Orissa, Jharkhand and West Bengal. However, almost all of them load iron ore in mines located in areas served by the Chakradharpur (CKP) Division of South Eastern Railway (SER).

A Priority C customer is one who places indents for at least five rakes a month and Priority D less than five rakes.

Average loading down

The average daily loading of iron ore by these customers at CKP division, estimated at 22 rakes a day, has dropped by about 50 per cent lately. There are days when there are no requisitions (indents) for rake loading from these customers. Two months ago, the number of pending indents with SER was as high as 5,000.

Inquiries with SER reveal that its average daily loading of ore has dropped by 10 rakes a day on an average, the equivalent of about 37,000 tonnes, for the past couple of weeks and the drop is due to poor loading by Priority C and D customers as the loading by the integrated steel plants (known as CBT customers) remains intact.

High costs

This is costing the Railways dear. But then it is also a classic case where the Railways decided to give priority rake allotment to customers without checking the adequacy of their infrastructure, either at the loading or unloading points.

In most cases, these customers do not have any infrastructure of their own. The decision of the Railways, it therefore appears, was presumably taken on considerations not strictly based on merit of the case.

The plight of the sponge / pig iron producers is understandable. For various reasons, there has been a slump in demand for their products, leading to a sharp drop in price.

The price has declined from more than Rs 27,000 a tonne in July to around Rs 16,000/17,000 now. Worse, the mine-owners supplying ore have so far refused to bring down the price of the ore. Which means the pig iron and sponge iron producers are doubly hit.

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