Railways freight volumes may puff past target

Coal, iron ore have seen dip in their traffic; cement and steel have helped Indian Railways to keep pace with its budget targets

With a volume growth of six per cent in April-September, the Indian Railways is expected to surpass its Budget loading target for this financial year. This is in contrast to last year’s, when it fell short of its estimate by 15 million tonnes (mt).

While coal and iron ore saw a two-mt fall in traffic in July-September, cement and steel helped the railways keep pace. Railway Board officials said they expected coal traffic to pick up before the year-end.

Officials said the improvement was due to innovative methods. “We have converted the rail-cum-sea route on the eastern and western coasts into an all-rail one, which helped customers cut handling costs,” D P Pande, member (traffic), told Business Standard. In Andhra Pradesh, Karnataka and Tamil Nadu, customers are expected to opt for this.

The move helped boost steel traffic.

Other measures were allowing two point rakes for the same commodity. This boosted efficiency and growth in cement traffic. “We are carrying 15 such rakes a day,” said Pande. A rake is a number of carriages coupled together.

For 2013-14, the Budget had set a loading target of 1,047 mt, 40 mt more than the volume carried last year. To achieve it, the railways would have to increase its loading volume four per cent.

In July-September, cement volumes recorded an increase of two mt. The expected additional traffic from Coal India is likely to add Rs 100 crore to the revenue and 17 mt to volume. Fertilisers, cement, steel and urea saw a slowdown in the first six months of this financial year.

The earnings for April-September were Rs 43,458 crore, an increase of nine per cent. If the earnings target for 2013-14 is to be met, earnings would have to see the same growth.

Former Railway Board officials said the first six months of this financial year included the lean months of June and July, when traffic and earnings fell. With the 15 per cent busy season surcharge and 1.7 per cent fuel adjustment component (FAC), the railways is expected to come up with better figures in the second half. The FAC is expected to generate Rs 700 crore, which could help compensate for the fuel costs.