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Container train operators have received partial relief from Indian Railways for domestic movement of commodities whose haulage charges had been hiked in December last year.
The move is likely to have a positive impact on earnings of operators, including Container Corporation of India, Gateway Distriparks Ltd, Arshiya Rail, Sical and ETA. But, the amount of benefit to each operator will vary.
Broadly, the Railway Ministry has said that the container operators will not be asked to pay higher haulage charges, if they load less than one third of total containers in a rake with those commodities.
The container train operators pay haulage charges to the Railways for use of its locomotives, tracks and other infrastructure. For these players, the haulage charges account for nearly 70 per cent of the operating costs.
Charges raised
The Railway Ministry had increased by as much as 170-200 per cent haulage charges for the movement of heavy commodities — cement, stone other than marble, iron and steel, alloys and metals, and petroleum products — by container train operators. The increase varies based on the commodity, distance and size of the container.
While the increase was initially proposed for both domestic and export-import traffic, the Ministry later exempted export-import cargo and domestic movement of ceramic tiles and white cement from the hike. The new rates were effective from December 1, 2010.
Competition panel
The Association of Container Train Operators had approached the Railway Ministry against the move. With the Railways not reacting initially, one operator, Arshiya Rail, had even approached Competition Commission of India against the move. The move of Railways was basically aimed at discouraging container train operators from poaching what they regard as their traffic.
In the latest circular, the Railways has exempted flour and pulses from the higher charges. It has also said that the pre-hike charges will be applicable if less than 30 twenty feet equivalent unit (TEUs)-sized containers are the notified commodities. One rake usually comprises 90 TEU containers.
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