In a bid to boost freight traffic volumes, the Indian Railways has abolished its dual freight policy for carrying iron ore, a long-pending demand from industry players.
According to a 2008 policy, the tariff for transportation of iron ore to ports for the purpose of exports is three times the rate charged for transporting the same commodity for domestic use in steel and cement industries.
“The dual pricing policy for iron ore transportation was very complicated. From now on, whether you move the iron ore to the plant or to the ports for exports, we will be charging the same,” Railway Board Member (Traffic) Mohammed Jamshed said on Wednesday. Cheering the move, industry representatives said the freight rationalisation will help both Railways and the iron ore sector. “It is a long-overdue move. We had urged the government to bring parity in rates of iron ore transportation irrespective of point of origin and destination,” said Basant Poddar, vice president at Federation of Indian Mineral Industries. A Comptroller and Auditor General (CAG) report tabled in Parliament last year had pointed out that the freight business suffered losses of around Rs 29,000 crore in 2008-13 due to the dual pricing system for transporting iron ore. It had found that iron ore was carried at lower domestic rates but was diverted for exports resulting in huge losses to the exchequer.
