Any increase in cement cost will adversely impact the growth of the industry
The upward revision in freight rates by the Railways will increase the cost of cement by Rs.15 per bag or Rs.300 per tonne, according to Cement Manufacturers' Association (CMA).
The increase, in the average freight rates for cement and clinker by 24 per cent, is bound to dent the concerted efforts made by the industry for increasing the rail co-efficient of cement. The hike would also not be in the long-term interest of the Railways, CMA president M.A.M.R. Muthiah said in a release.
Stating that the rail transportation cost of cement “is already very high”, he said in the last couple of years, the Railways had revised the classification of cement and clinker consistently resulting in indirect freight hikes. In addition, a further burden on cement industry has been imposed by levy of various surcharges.
The cement industry would not be able to bear any additional burden. “The hike would further make things difficult for the industry,” Mr. Muthiah said, adding that any increase in the cement, the main construction material, cost would adversely impact the growth of the industry and capacity additions. This would affect construction projects and in turn hamper the economic growth of the country. The CMA wanted the increase in freight rates withdrawn.