Coal Ministry sets up IMG to study rail freight tariff

The Coal Ministry has formed an inter-ministerial group to study the trend in the rail freight tariffs over the last two-three years and its impact on the price of coal.

The six-member group, under the chairmanship of Joint Secretary, Coal, has representatives from the ministries of power and railways, according to an official memorandum.

Representatives from Coal India and the Central Electricity Authority are also part of this group, it said.

"The terms of reference of the group would be to study the trends in rail freight tariffs over the last two-three years and its effect on the price of coal," it said.

The group will make a report and submit it to the government, it said.

The government had in June increased freight rates by 6.5%.

The previous UPA government had increased the coal freight rate by 5.7% in Railway Budget 2013-14.

Former Coal India (CIL) Chairman and Managing Director S Narsing Rao had said: "Coal sector, including Coal India, will have no effect due to increase in coal freight charges."

Coal India, which accounts for over 80% of the domestic coal production, had increased the price of a certain grade of coal from one of its mines in Godda district of Jharkhand in April.

The increase has been with effect from April 1 as per the decision taken by the Coal India board.