On a day when minister Dinesh Trivedi presented his first railway budget, the railways went for an upward revision in the haulage charges for containers through a notification late in the evening.
The railways is targeting 1,025 million tonnes of goods traffic in 2012-13, 55 million tonnes more than the revised estimate target of 970 million tonnes in 2011-12. The freight earnings target has been kept at Rs 89,339 crore, a growth of 30.2 per cent over the revised target for the current year.
Owing to the revision in freight rates on March 6, the earnings target for goods has been retained. In volume terms, the railways has been hit by a ban on the export of iron ore. In the budget speech, Trivedi said, “The continued ban on the export of iron ore by the Karnataka and Orissa state governments led to scaling down the loading target from 993 million tonnes to 970 million tonnes in the revised estimates.”
The haulage charge for container domestic traffic is based on freight-all-kind (FAK) rates or commodity specific rates. To retain heavy commodities in its fold, the railways has increased the haulage charges for carrying sponge iron and pig iron. Sugar, oil cake & seeds and foodgrain, which are low-rated commodities, are excluded from the category of commodity-specific rates, which are higher than FAK rates. The distance slabs for hauling these commodities have also been revised.
Though the railways had cut the freight rate for the export of iron ore, it does not anticipate a rise in loading, owing to the ban on iron ore exports. While retaining the iron ore loading target for 2012-13 at 104 million tonne, it scaled down the target for iron ore export from 10.4 million tonnes to two million tonnes. An increase in coal and fertiliser loading is expected to account for most of the rise in freight volume.
The 20 per cent rise in the freight rate earlier this month came after the railways had, in October, revised the busy season charge from seven per cent to 10 per cent. The development surcharge, levied over the base freight rate and the busy season charge, was also raised from two per cent to five per cent. The railway minister today justified the pre-Budget rise saying the rationalisation sought “to better align the freight tariff with the cost of rendering services and ease the pressure on railway finances”.
Trivedi seemed conscious of the fact that the model of heavy cross-subsidy could not be sustained for a long period. “If this continues, I am afraid the railways may lose freight traffic to roads,” he said.(TRIVEDI EXPRESS)
According to S P Singh, coordinator, Indian Foundation of Transport Research and Training, roads account for 80 per cent of the freight traffic, while rail freight has a share of only 20 per cent. A decade earlier, the railways’ share was 35 per cent, while that of roads was 65 per cent. Singh said expanding the multi-lane highway network in the last decade had enabled speedier growth in truck freight business, against rail freight.
Singh said, “The railways has to rejig its business policy to expand the bouquet of goods and service package and win the trust of consignors/consumers, as 70 per cent of the cargo moved through roads is from small and medium enterprises. The railways must replace and improve its rolling stock and tracks at a faster pace to provide safe and time-bound service.”
