Railways flexible on cargo haulage rates

25-40% discount where rakes return empty

In response to a core sector slowdown, the Railways plan to introduce a "flexi-pricing" programme for freight customers, which will include a 10-20 per cent lean season concession.

In what can benefit steel producers, the Railways also plan to offer 25-40 per cent discount to customers on journeys where rakes return empty.

Officials told Business Standard today that the Railways were faced with idle-capacity for the first time since capacity was expanded by 32 per cent. The core sector recorded a lower growth rate of 3.6 per cent during April 2005 compared with 10.5 per cent last year.

The Railways will hold meetings on concessional fares to freight customers who account for more than one million tonnes of traffic.The meetings will begin next week while notification about the concessions will come later this month.

Officials said Railway Minister Lalu Prasad had instructed that while both fares and freight should not be increased simultaneously, the Railways should concentrate on improving revenue by adding volumes and enhancing capacity.

"We are planning to generate additional revenue of Rs 1600 crore this year through measures like carrying more traffic provided there is no further slowdown in the economy," said an official. General managers will also be empowered to grant concessions to freight customers.

According to a draft freight policy, which will be discussed with railway users, the period between April 1 and September 30 will be the lean period while that from October to March will be busy.

Customers offering traffic in the empty flow direction (routes on which rakes return empty) will be granted a concession of 25-40 per cent during the lean period and 15-25 per cent during the busy season.

Officials said while raw material and coal for the steel-sector were mostly transported by trains, on the return journey, the finished products were moved by road.

"We want to tap this traffic and plan to do away with the practice of charging a higher class rate for less than trainload traffic during lean seasons," said an official.

Under the present policy, if a customer is charged for moving trainload commodity at a class rate of 140, less than trainload of the same commodity is charged at a rate of one higher class.

The Railways also plan to offer a concession of 10-24 per cent on incremental loading offered during the lean period. Besides, 20 per cent of the traffic during the lean period will be given preferential allotment of rakes during the busy season.