Exim News Service reports that Indian Railways has imposed a INR 200 per tonne distance surcharge on movement of iron ore meant for exports. The new rates are effective from August 7th 2009.
A senior Railway Board official said that the Railways has retained the freight classification for iron ore.
Freight on iron ore is at present put in Class 180 of the Railways’ freight classification. In addition to the charges based on distance under this classification, iron ore meant for exports also attracts a surcharge ranging from 0 % to 125%.
The official clarified that INR 200 per tonne distance surcharge would be over and above the existing surcharge.
Another official said that "The changes have been done under the dynamic pricing formula being practiced by the Railways. Now that the international market is up and the freight mobilisation has increased, the levy of distance surcharge will increase our revenues. Earlier, when demand slumped, we gave incentives and discounts."
Mr R K Sharma Federation of Indian Mineral Industries’ secretary general said that "We had proposed a reclassification of rail freight for iron ore to 160 from 180, which could have brought down the freight cost by INR 250 per tonne. Instead, the Railways have imposed INR 200 per tonne distance surcharge. All these may severely impact ore exports."
He said that the railways’ freight constitutes almost one third of the total cost of iron ore. This works out to around INR 1,200 per tonne price of iron ore.
Source: Steel Guru
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