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The iron ore freight classification has been revised.

The rail transportation of iron ore has become costlier again. With effect from April 1, the classification has been revised upward to Class 180 from the current Class 170. This is in keeping with the Railway Minister’s favourite practice of hiking freight rate outside the Budget proposals. More important, added to the basic freight, are various other imposts such as busy season surcharge, congestion surcharge, development charge and terminal charge in addition to pu nitive charges, demurrage charges, rent on land used for railway sidings and for some particular section higher freight under freight rationalisation scheme. For example, from April 1, the congestion surcharge has been hiked to 100 per cent from 60 per cent. According to one analysis, the cost of transporting iron ore by rail, for example, from Bimlagarh to Paradip port (713 km) jumped from Rs 615.40 per tonne in April 2005 (there were no additional levies at that time) to Rs 1,714 per tonne in April 2008 (when the basic freight is Rs 782 and other levies Rs 932 per tonne). The per tonne kilometre cost thus increased from around 86 paise to more than Rs 2.4 during the period.

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