Rake crisis keeping Dhamra Port’s cargo handling on the slow track

The Adani Group-controlled Dhamra Port registered a 47 per cent growth in cargo handling to 21 million tonnes in 2016-17. In 2017-18 — a better year in terms of demand growth especially for the steel sector which contributes significantly to the port’s business — Dhamra’s cargo handling remained more or less flat.

According to sources, the clue lies in rake availability. Dhamra deals with bulk cargo and unlike many other ports, its evacuation logistics is fully rail-based. Also moving its prime cargo such as iron ore and coking coalby road is highly cost-inefficient.

Compared to 2016-17, the port got 452 rakes last year – a drop of 15 per cent in availability. Railway sources admit the shortfall. According to them, supply of empties to Dhamra was restricted to ensure availability in other sectors.

But such explanations barely help the industry. At a thumb rule of 3,700 tonnes a rake, Dhamra lost 1.7 mt cargo, due to drop in rake supply. Considering the demand growth, the port claims to have lost an opportunity to carry 7 mt more cargo than 2016-17.

Rake crisis

After the coal crisis, India is now hit by a serious shortfall of railway rakes. While there is no official statistics, industry insiders feel the current wagon availability of 250,000 is approximately 20-30 per cent short of demand and is limiting India’s growth opportunity.

“Cement prices increased in Bihar in the October-December quarter due to non-availability of rakes and related supply shortfall,” said a senior official in a prominent cement company. Rating agency ICRA estimated cement output to have grown by five per cent in the last fiscal.

In the problem manifested during August-September last year, the demand for coal had shot up and the railways diverted rakes to meet thermal coal demand for power sector. As demand for thermal coal continues to be high, other sectors are languishing.

The domestic steel sector, which is currently witnessing a 5.7 per cent growth against the global average of 1.6 per cent, is feeling the pinch the most.

Sources in the state-owned SAIL, which imports coking coal through Dhamra for at least three of its steel plants, confirm concerns on wagon availability.

The concern is more intense in moving iron ore. “For the last six-seven months, we are spending sleepless nights in ensuring smooth supply of ore,” a source said. He, however, said that the rake crisis is yet to impact hot metal production as the company tries to maintain four days buffer stock at plants.

“Iron ore is a major revenue churner for railways, we do not know why they are neglecting our demands,” said a SAIL source. Railway sources admit the shortfall, but they are unable to offer any quick solution.

Amend SFTO

Interestingly, the problem is not as intense in moving finished steel as the Railways allowed movement of steel in private wagons under the Special Freight Train Operator Scheme (SFTO). At least two top private steel makers already invested in the scheme.

But the scheme is yet to be opened for general purpose wagons as is used in transporting minerals. Last heard, the Rail Board is actively considering a policy decision to modify the scheme for general users.

“We are waiting for the policy decision for some time. If allowed, we will invest in railway rolling stock,” a source in Dhamra port told BusinessLine .

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