Comments
Kribhco Infrastructure – the container train operations arm of fertiliser manufacturer Kribhco – has complained to the Competition Commission of India (CCI) about the Railways.
The issue is the hike in haulage charges. Container train operators (CTO) have to pay haulage charges to the Indian Railways for using its facilities such as track, locomotive and signalling systems. This makes CTOs largely dependent on the Railways.
Kribhco is the second CTO after Arshiya Rail to have dragged the Indian Railways to CCI on the same issue. Since December 1, the haulage charges have gone up by 50-200 per cent for certain commodities in domestic segment.
DOMESTIC BUSINESS HIT
The domestic business of many CTOs has been impacted after December 1, 2010, when the Railways implemented steep hikes in haulage charges.
This is evident from the sharp dent in Container Corporation of India's (Concor) fourth quarter operating profits in the domestic business. Concor's profit before tax and interest in the domestic segment was down by 50 per cent to Rs 17.97 crore for quarter ended March 31, 2011.
In physical terms, Concor's domestic throughput dipped by 8.5 per cent in the fourth quarter of 2010-11.
The Railway Ministry, in September 2010, raised haulage charges by 170-200 per cent for movement of heavy commodities – cement, stone other than marble, iron and steel, alloys and metals, and petroleum products – by CTOs.
The Ministry had initially proposed the hike for both domestic and export-import traffic.
But, following protests by the Association of Container Train Operators (ACTO), the Railways 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.
When contacted, Mr Sankalp Shukla, Executive Member of ACTO, and a member of FICCI's infrastructure committee said, “The domestic business of many operators has been hit after the recent haulage charge hike. Given the large investments made by operators, we are all concerned. There maybe a case for having an Ombudsman for this business, if not a regulator.”
CARGO Movement
The CTOs perceive the Ministry's move to be ‘anti competitive' as it discourages domestic movement of heavy commodities.
In tonnage terms, the domestic traffic moved by container operators is below two per cent of the total cargo moved by Indian Railways, which itself transports commodities such as cement, iron and steel, metals and petroleum products in bulk.
The difference in the scale of operation is evident from the traffic data.
In 2010-11, the Railways carried 99.03 million tonne (mt) of cement; about 92.71 mt iron ore (excluding exports); 40.25 mt of mineral oil (petroleum, oil and lubricants); 32.3 mt of pig iron and finished steel.
In contrast, all CTOs together carried a total domestic traffic of 10.16 mt during the period.
mamuni@thehindu.co.in
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.