The Hindu Business Line : ‘Reclassify iron ore tariffs’

New Delhi, Feb. 26 The domestic steel industry has found the Railway Budget 2008-09 “balanced and forward looking” and complimented the Railway Minister for developing corridors for iron ore and coal to meet the growing needs of the steel and power sectors.

The industry has also welcomed the move to leave iron ore and coal freight charges untouched.

“However, a reclassification in rail tariff is required for the supply of iron ore to domestic steel industries as it becomes a value added product for the development of the nation,” the Joint Managing Director and CEO of JSW Steel Ltd, Mr Y. Siva Sagar Rao, told Business Line. He added that a couple of companies are handling full rakes for serving customers and to increase rail co-efficient, steel industries must be given some special incentives on steel transportation.

“ …developing exclusive freight corridors for iron ore and coal will meet growing needs of emerging sectors like steel and power,” Essar Steel Holdings, Chief Executive Officer, Mr J. Mehra, said. He also said that the proposed increase in investment on new railway lines and addition of 20,000 new wagons to the railway fleet augurs well for the domestic steel industry. “In-time availability of rakes must be ensured and monitored as all the steel plants are expanding and railways’ share in both finished goods and raw materials will be increasing, a special attention to rake availability must be given.”

However, the steel industry has been expecting some relief from numerous additional levies like congestion surcharge imposed during past two years on iron ore movement, Mr Mehra said.

“We hope the Minister will revisit this issue in the days to come.”

On the other hand, stainless steel consumption is expected to increase by at least 1,40,000 tonnes over the next one year after the Railway Minister announced plans to build new freight wagons and passenger coaches from the metal.

“It is not as though stainless steel is not being used in coaches at the moment, but is very low at around 5 tonne per coach. But now this is expected to go up to around 10 to 11 tonnes per coach,” Mr N.C. Mathur, President of the Indian Stainless Steel Development Association, said.

According to him, using of freight wagons made of stainless steel will also help in the reduction of maintenance costs and also be beneficial in carrying more loads as they will be lighter.

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