The Hindu Business Line : Rlys earnings from iron ore traffic may rise 44.56% this fiscal

New Delhi, Feb. 26 The Government’s official stance is aimed at discouraging iron ore exports, but this has turned out a bonanza for Indian Railways. IR expect the earnings from moving iron ore to touch Rs 3,948.14 crore (as per the revised estimates) during the current fiscal, an increase of around 44.56 per cent over last year. Last fiscal the Railways moved 40 million tonnes of ore and earned Rs 2,731 crore.

This increase is despite a huge surcharge introduced through a notification after the Railway Budget last year.

Budget estimate

As per the budget estimates, IR expects the revenues from iron ore, meant for exports, to touch Rs 4,386.25 crore during the 2008-09 financial year and hopes to move around 56.82 million tonnes. This year it is expected to touch a level of around 52.51 million tonnes.

In comparison, the iron ore for the various domestic steel plants that IR has moved is expected to be only around 44.47 million tonnes and the revenues likely to touch Rs 1,284.2 crore by the end of the current fiscal. During the fiscal 2008-09 IR hopes to move around 49.83 million tonnes and earn around Rs 1,466.79 crore.

Surcharge hike

The Railway Ministry in December last year, within two months of increasing the congestion surcharge on iron ore traffic, hiked the surcharge to 60 per cent per tonne.

Earlier, the congestion surcharge was at 35 per cent per tonne, which was effected from October 1 — an increase of 14 percentage points over the 21 per cent surcharge level prevailing till September-end. The 21percent congestion surcharge was imposed on iron ore exporters from April 1, through a notification after the Railway Budget.

On the other hand, the Federation of Indian Mineral Industries (FIMI) has welcomed the move by the Railway Minister, Mr Lalu Prasad, for not increasing the freight charges for the movement of iron ore.

“We are also hoping that the freight charges are not increased like last year as they have gone up by nearly 52 per cent from April 1, 2007 till now. Also, the issue of the availability of wagons for movement of iron ore for exports has not been addressed and is still a cause of concern for us,” Mr R.K. Sharma, Secretary General of FIMI, told Business Line.

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