Railways weighs freight rate cut as volumes slip
In fact, the idea was discussed even before last week’s passenger fare hike, targetting a 20% increase in revenue from this stream.
Cross-subsidising the passenger segment by freight had boosted freight rates beyond sustainable levels and it is reckoned that the passenger fare hike will give the railways leeway to cut freight and aim higher volumes.
Over 70% of the railways’ revenues come from freight but the segment has been witnessing very low growth rates in volume — at 4.3% till now in the current fiscal. The railways is likely to miss its target of 1,025 million tonnes for 2012-13 by around 20 mt.
With revenues hit, the railway ministry is planning to revise its plan outlay downwards, which was set at R60,100 crore in the last Budget to Rs 51,000 crore.
Rail freight rates have been sharply hiked over the last few years — the latest was a 20% hike in March 2012. A 22% increase in haulage charges — the amount private container operators pay railways to use its infrastructure
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