The Hindu Business Line : Freight discount scheme lures more iron ore traffic thru South Eastern Rly

Kolkata, Nov 24 The freight discounts, as announced by the Railways early this month to boost loading of iron ore for exports, have benefited South Eastern Railway (SER) more than the East Coast Railway (ECoR). As many as 25 requisitions for exports through Paradip port are pending with SER as compared to virtually zero requisition with ECoR for the same port.

Distance criteria

This is because the exporters will be entitled to concessions if the distance between the point of loading and the port is more than 400 km. The distance between the iron loading points in Nayagarh area served by the ECoR and Paradip port is much less than 400 km, with the result even those who were earlier loading in Nayagarh area have now opted for SER loading points. The distance between SER loading points and Haldia/Paradip ports is more than 400 km.

Beneficiaries

Since the present economic meltdown and the consequent drop in international ore price have forced most trader-exporters of the ore to withdraw, only miner-exporters, and that too with long-term contracts, are able to hold on to the present situation and it is felt that the present concessions, as announced by the Railways, will benefit only some miner-exporters.

SER, the major transporter of iron ore, both for exports and domestic consumers, has so far in November loaded on an average 43.1 rakes a day as compared with 41.2 rakes a day in October.

It might be interesting to note that in the first week of November, i.e., prior to the announcement of the discounts, the average daily loading of iron ore was 38.8 rakes which jumped to 45 rakes a day during the period from November 8 and 23, i.e., after the announcement of the discounts.

The loading of iron ore export rakes, which was 4.1 rakes a day prior to the announcement of the concessions, rose to 7.2 rakes a day after the announcement of the concessions.

It might be interesting to note that only two slabs of freight discounts have been announced for ECoR, 25 per cent and 10 per cent as against three slabs, 25 per cent, 40 per cent, 50 per cent, in respect of SER.

While virtually none will avail themselves of the 25 per cent discount in ECoR, the 10 per cent discount to be available on movement along the difficult Kirandul-Kottavalasa line will benefit a limited few.