The Hindu Business Line : SW Railway freight discount: Iron ore rakes start moving to Chennai port

Mangalore, Nov. 13 East coast ports such as Chennai and Ennore seem to have taken advantage of the recent distance-based freight concession circular issued by the Railway Board to South Western Railway (SWR) zone.

Sources in Railways told Business Line that it is too early to come out with a conclusion on the impact of the circular. However, the preliminary indications reveal that iron ore rakes have started moving towards Chennai port.

“This circular came on November 8. It won’t be translated into traffic in a day or two. As in logistics there are lot of back-end arrangements to be made. Definitely, there is some response,” said an official.

With the discount, around three rakes a day are moving towards Chennai port.

The SWR loaded three rakes each to Chennai port on November 8, 9 and 10, and four rakes on November 11.

There are around 20 loading centres in Bellary-Hospet region. The distance from the loading centres to Chennai port is between 520 km and 620 km.

Though no rake was loaded to Ennore port for about 40 days, two rakes were loaded after the circular.

The distance from the loading centres in Bellary-Hospet region to Ennore port is between 544 km and 644 km.

In the distance-based freight concession for movement of iron ore, there is no discount for the distance slab of up to 350 km. However, for that of 351 km to 450 km, the circular offered 20 per cent discount. The discount is 35 per cent for 451 km to 550 km, and 40 per cent for above 550 km. All the above discounts are subject to minimum normal tariff rate at 350 km.

Loading is yet to start for other east and west coast ports.

The distance between the loading centres in Bellary-Hospet and Mormugao port is between 290 km and 400 km.

Mr Praveen Kumar, General Manager of the Hubli-headquartered SWR zone, said that this circular is a very promising step.

Sources in the shipping sector said that even after this circular, the movement of iron ore to New Mangalore Port is yet to start.

The distance between the loading centres at Chitradurga (another ore producing region) and New Mangalore port is between 375 km and 425 km.