Rlys to charge iron ore exporters an extra of Rs 500/tonne

Our Bureau New Delhi | Updated on January 25, 2011 Published on January 25, 2011

From Thursday, iron ore exporters will have to shell out Rs 500 extra for every tonne of traffic moved by rail. This follows a move by the Indian Railways to increase the distance-based charge – which is a charge on top of the freight rates — for iron ore exports by Rs 500 a tonne.

Now, an iron ore exporter will have to pay a distance-based charge of Rs 1,500/tonne.

This hike is over and above the higher amounts that the exporters were already paying. For instance, in December 2010, to move one tonne of iron ore for a distance of one kilometre, exporters were already paying 66 per cent higher to the Railways compared with what they paid in December 2009.

The move will help the Railways beef up freight revenues in the backdrop of low level of loading of iron ore exports. In fact, despite a 41 per cent dip in loadings of iron ore exports in December 2010 against December 2009, the Railways had recorded a 7.87 per cent increase in revenue earnings from iron ore export movement.

The Railways moved 2.09 million tonne of iron ore export traffic in December 2010 and earned Rs 413.87 crore.

“If they increase the rates by Rs 500 a tonne, the exports will become unviable and uneconomical,” said Mr R.K. Sharma, Secretary-General, Federation of Indian Mineral Industries. “The Railways is already suffering because of the ban imposed on exports from Karnataka. With this hike, the loading from Eastern sector is bound to be affected,” he added.

The Railways has been depending on freight fare hikes to achieve the revenue target. Other commodity groups – apart from iron exports – where similar hikes can be seen in the amount the users have to shell out to Railways include domestic containers (24.89 per cent), EXIM container (8.4 per cent), fertilisers (5.73 per cent).

The rail freight customers – across the board — on an average were paying 4.21 per cent higher in December 2010 against December 2009 to move one tonne of goods by one kilometre.

In January, data are likely to reflect sharper trends as Railways have effected across-the-board rate hike with effect from December 27. Further, there were also separate hikes in movement of sugar and de-oiled cake by changing classifications.


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Published on January 25, 2011
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