10-20% Concession On Iron & Steel Freight Rates Likely

The Union railway ministry will soon announce a new package of concessions on freight rates for iron and steel, revealed railway board chairman M Ravindra. The concessional rates are likely to range between 10 and 20 per cent.

The full package is still on the anvil but some concessions may be announced in the next few days, said Ravindra. The incentive scheme is part of an exercise to boost freight traffic in general and iron and steel traffic in particular, he added.

The railway board chief expressed concern over the static tonnage of iron and steel moved by the railways in the last two years despite the increase in steel production. The causes for this development are being examined by the Railways, he said.

 

Simultaneously, the Railways have also decided to offer special incentives to step up the offtake of iron and steel. This could be achieved either by re-classifying goods so that freight rates on iron and steel become cheaper, or by allowing a rebate on movement of greater quantities on an assured basis in a year so that the rebate is proportionate to the indicated/indented demand.

The Railways will also bear the full cost of conversion of metre gauge railway siding to broad gauge wherever there is such a requirement. Hitherto, the concerned user was required to undertake the conversion at its own cost.

Ravindra expressed satisfaction with the quality of steel supply to the Railways, but said supply of inferior stock of rails by the lone supplier, the Bhilai steel plant, had cost the Railways about Rs 50 crore.

There were cases of fractures even before the rails were laid or used for traffic in any significant manner, charged Ravindra. There is great scope to improve the quality of rail manufacturing, which has not yet reached global standards, he added.

The Railways have now decided to withhold payment to the plant unless the stock is either replaced or it is proved to the Railways satisfaction that the supplies match specified standards. The Railways are also discussing the issue with the Steel Authority of India.