Odisha to fix ceiling on ore transportation cost

Steel makers complaining of exorbitant transportation rates for movement of key minerals like iron ore and chrome ore in Odisha can heave a sigh of relief. The state government has decided to put a ceiling on ore transportation cost to rein in unfair trade practices.

Steel companies were passing through a rough patch as steep cost of mineral transport tore into their profit margins, impacting viability of their operations.

“We hope to fix a ceiling on mineral transportation rate from July 1. Collectors of all mineral rich districts are to submit report on transportation charge limits to be imposed in their respective districts by June 20. They have already been issued letters in this regard by the commerce & transport department. Once we receive the reports from different districts, the ceiling rate would be decided at the meeting of the state level technical committee,” said director (mines) Deepak Mohanty.

Mohanty said, the cap on transportation charges would be different for different districts. The ceiling is being determined factoring in parameters like amount of ore carried, condition of road infrastructure and traffic frequency.

The ceiling rate would be binding on all registered transport agencies and whoever charges higher would not be allowed to transport ore, he added.

Agencies engaged in mineral transport are registered with the Integrated Mines and Minerals Management System (i3MS), which is an online data verification and permit generation software for mineral transport.

Anil Ahuja, executive vice president, Bhushan Steel, said, “The transporters are looting us. Steel companies are suffering due to unacceptably high freight cost of ore. Ore transport cost in Keonjhar is higher than imports of coking coal from Australia. We are happy with the initiative of the government to put a ceiling on transport rates.”

Recently, a delegation of Indian Steel Association (ISA) had met the state chief secretary, urging the state government to take firm steps to curb cartelisation efforts in transportation sector to bring down logistics costs to realistic levels. The steel association hoped that the initiative taken by the government for e-auction of road transportation contracts would rationalise the transportation rates and make the steel producers in the state more competitive.

The e-module for transport agencies has been prepared by MSTC Ltd. MSTC is scheduled to make a presentation at the mines directorate on Thursday.