The Hindu Business Line : `Freight hike will not be uniform on all routes'

Facts to justify
The freight hike could not be enforced immediately on certain routes because of the market condition.
In the South, the high rate would get absorbed after the mango season is over.
In respect of certain contracts, the prevailing rates must be maintained for certain length of time

Kolkata , June 7

Mr D.P. Agarwal, Vice-Chairman & Managing Director of Transport Corporation of India, the country's largest transport company, feels that the rise in prices of petrol and diesel was inevitable.

"True, there has been 25 per cent increase in the price of diesel in the past one year but then how long can the Government go on absorbing the impact of shooting oil prices in the world market,'' Mr Agarwal asked?

The impact of the present diesel price hike, as he felt, would not be uniform on all sectors.

For example, the freight hike could not be enforced immediately on certain routes because of the market condition. On certain routes, the freight rate is already high.

For example, on certain routes in the South, the freight rates are high because of large-scale movement of mangoes. No further increase would be possible on these routes.

The present high rate would perhaps get absorbed after the season is over.

In respect of certain contracts, the prevailing rates must be maintained for certain length of time.

The escalation clause could not be enforced always.

Mr Agarwal, however, indicated that the ultimate consumers would feel the impact of eight to 10 per cent increase in costs as a sequel to Rs 2 per litre increase in diesel price.

Adulteration

Asked if the diesel price hike would lead to large-scale adulteration of it with cheaper kerosene, he replied that such an exercise might be limited to certain segments and that too over a very limited period. It would certainly not be true over long run.

Calls for more steps

Mr Agarwal emphasised the need for taking necessary steps to curb overloading, which slowed down the speed of vehicles and damaged roads causing further slowing down and therefore inefficient use of costly fuel.

He also favoured elimination of check-posts, surprise checks and unauthorised hold-ups which only restricted the movement of vehicles without enriching the states' coffers.

"In advanced countries, a goods vehicle can run on an average 800 to 1,000 km a day against 250 to 300 km in our country and, in certain cases even as low as 200 km, and therefore the purpose of constructing new highways and expressways will be defeated unless we can ensure smooth and uninterrupted movement of goods vehicles at a fairly high speed over a long stretch", he said.

The collection of levies, if absolutely necessary, should be through simpler procedures so that the delay is minimum, he said.

As a long-term measure, the use of modern fuel-efficient vehicles must be encouraged.

Also, the Government must provide lands on easy terms to develop transport hubs outside the city limits so that goods vehicles are not required to come to the congested city areas.

Also, there should be more bypasses and overbridges over the railway tracks and diversions, he added.

Mr Chittaranjan Das, Vice-President of All India Confederation of Goods Vehicles Owners' Association, said the small vehicle operators having one or two vehicles would be worst hit as they would not get the benefit of any freight hike.

Big companies would enforce the escalation clause and collect higher freight from their customers without sharing the increased freight with the vehicle operators who continue to be at the mercy of big companies.