The Hindu Business Line : New Rail board norms — Broadbasing iron ore loading points

The Railway Board has issued new guidelines in respect of the loading of iron ore, the objective being to broadbase the loading points to improve the availability of the mineral to those in need of it. The guidelines have been framed keeping in view the present situation where the number of applications seeking allotment of rakes far exceeds the capacity to load and unload, particularly in areas under the jurisdiction of the South Eastern Railways (SER) and East Coast Railways (ECoR), the two major iron ore handling zonal railways.

The imbalance in demand-supply situation, the Railway Board has noted, is the fallout of a policy pursued so far making no differentiation between customers who have invested in infrastructure such as sidings and wagons, those who have refrained making such investments, those who offer outward traffic and those who do not make any such offer. This has led not only to inadequate level of satisfaction, particularly of the customers classified as Priority C; but also to concentration of indents in a few stations and sidings where the capacity to load has already reached the maximum.

The Priority C customers are those who load a minimum of five rakes of iron ore a month on the basis of their production of pig iron or sponge ore (a minimum of 10,000 tonnes a month) backed by Excise certificates. There are six identified congested sidings, five in Dongaposi area and one in Barsua area which are heavily in demand. The five Dongaposi sidings are Deojhar, Banspani, Barbil, Jaruli and Barjamda, and Barsua is the lone siding in the Barsua area.

Interestingly, in iron ore rich areas served by both SER and ECoR, there are many other stations and sidings also geared to handle iron ore rakes, but these are not much in demand, presumably because of locational disadvantage.

Using these sidings for loading may entail additional road-bridging cost which the Priority C customers, mostly producers of sponge iron and pig iron, would like to avoid. There are 58 such customers or groups of customers. Under the new guidelines, the Railways, through administrative orders, may force the reluctant customers to load at the non-congested stations.

Legacy of top priority

The thrust of the new policy is this: the CBT (Central Board of Trade) and WIS (Wagon Investment Scheme) customers will be left untouched. There are only nine CBT customers — Tata Steel, Rashtriya Ispal Nigam Ltd (Vizag steel plant), Nilachal Ispat, Jindal Steel and five SAIL plants including IISCO.

The new policy makes it clear that the allotment of iron ore rakes to these plants should be such that their satisfaction level does not fall below 90 per cent subject to the availability of indents through the month.

The customers under WIS are “holy cows” who cannot be touched. They have invested in wagons and placed them with the Railways which, as per the contractual obligation, is bound to meet their requirements. However, the new policy has urged both the SER and the ECoR not to enter into any agreement under WIS, which is currently under review of the Railway Board.

Thrust on Priority C

This means the thrust of the policy is directed towards the Priority C customers. It makes it clear that no additional loading programme for this category of customers will be permitted by either SER or ECoR in congested stations.

Accordingly, SER and ECoR have been asked to prepare the list of non-congested stations/sidings. However the allotment of rakes will be made by the Executive Director, Rail Movement, in Kolkata, in consultation with the two zonal railways.

Another important feature of the new policy is that it will accord to priority to those Priority C customers who will offer maximum traffic, guarantee both inward and outward traffic (i.e. movement of raw materials and finished products) and have their own sidings.

In the matter of allotment of rakes, the Railways promises 75 per cent level of satisfaction those who have sidings for both loading and unloading, 60 per cent for those having siding at one end and 50 per cent for those having no sidings of their own at all.

The Priority C customer who guarantees at least 20 per cent of their production of outward traffic (finished goods like steel, pig iron and sponge iron) in a particular month can be assured of sufficient rake allotment to meet 75 per cent of its iron ore requirement.

The demand for rakes by other customers, known as Priority D customers, will be considered only after meeting the requirements of CBT/WIS and Priority C customers. Also, the demand for rakes for exports of iron ore is treated under Priority D category along with others whose requirement is less than five rakes a month.

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