The hike in export duty on iron ore by a whopping 30 per cent has come as a rude shock to various iron ore exporting ports on east and west coasts as well as the zonal railways serving these ports.
As it is, the picture on the export front has been dismal for the past few months thanks to a variety of factors such as the slump in international demand, hike in railway freight, supply constraints caused by the restriction on movement of the ore in various producing States and procedural delays.
What has been particularly upsetting for the logistics services providers is that the recent decision, which will add to the woes of not only exporters but also transporters and others involved shipments, has been announced at a time when the international demand is showing signs of revival. The spot market ore price is heading north.
Till November, all iron ore exporting ports, except Gangavaram, posted negative growth in throughput. Inquiries with the port reveal that there has been virtually no iron ore traffic in past couple of months. “Whatever growth we had was achieved prior to that”, said a spokesman for the port pointing out that the difficult iron ore situation in Odisha was responsible for it.
“We invest heavily in creating facility which remains idle following one line decision of the Government”, he observed.
Paradip port
A spokesman for the Paradip port pointed out that the port's iron ore traffic so far this fiscal was down by four million tonnes (mt) vis-à-vis the same period of last year.
“We were zero, it will now be double zero”, he said. The spokesman was not sure if in the present situation the port should go ahead with its proposed plan to add to the iron ore handling capacity.
Mormugao port
A spokesman for the Mormugao port, the country's largest iron ore handling port, said that the shortfall so far had been more than four mt, likely to double in the remainder of the current fiscal.
The iron ore for export accounts for 80 per cent of the port's total traffic. “We've no other choice but to explore other commodities like granite and maize to keep our head above the water”, he said.
Haldia dock
Inquiries with the Haldia dock revealed that the iron ore throughput so far in the current fiscal had been around three mt compared to 3.8 mt in the same period of last year. Between October and December, only seven rakes were handled at the dock – four in October, one in November and two in December.
Dhamra port
Odisha's Dhamra port, a joint venture between Tata Steel and L&T, is getting ready to start handling iron ore shipments and the rakeloads of the mineral have started arriving at the port. The effort will now receive a setback, it is felt.
A spokesman for the port was particularly critical of the structure of the railways freight. The railway freight on the Odisha ore if shipped through far off ports such as Visakhapatnam and Gangavaram would be less vis-à-vis nearby ports within the State.
South Eastern Railway
The country's largest iron ore loading zonal railway, South Eastern Railway, is worried at the probable fallout of the Government decision. But then SER has reasons to be worried.
Traditionally, iron ore accounted for the bulk of SER's total traffic, around 70 per cent. Not now. Between October and December, which is generally considered the busy season in railway parlance, the iron ore throughput was a little over one mt as compared to nearly 3.4 mt each in two earlier quarters.