Steel, cement sectors laud unchanged freight rate

Written by fe Bureau | New Delhi, Feb 26 | Updated: Feb 27 2008, 04:31am hrs
Steel and cement sectors heaved a sigh of relief as railway minister Lalu Prasad maintained the status quo in terms of freight rates on Tuesday. However, officials of the two sectors fear that there could be notifications later, which could undo the announcement. The Railways can alter freight rates round the year and have done so in the past by issuing circulars.

Ensuring that the routes, on which iron ore, cement and similar goods move, would be upgraded for running 30-tonne axle load trains, compared to 25-tonne axle currently, Lalu said it would help smoothen the movement of both finished and unfinished products and revised the freight loading target to 850 million tonne. He also announced 14% freight reduction on fly-ash.

Expressing happiness over the fact that freight charges have not been increased in the Rail Budget, Federation of Indian Mineral Industries secretary general R K Sharma said, It is good to note that freight charges have not gone up. But I hope the railways do not increase freight during the course of the year like last year... During last one year the freight have been revised five times that resulted in 52% hike.

Announcement of stainless steel bogies in mail and express trains would help grow the stainless industry grow four-fold by 2012. Currently, the country produces about 40,000 tonne stainless steel that could be used for various purposes in the railways sector such as rail wagons, passenger coaches and various facilities at the railway stations, Jindal Stainless Ltd director N C Mathur said.

Doubling of some railway lines would definitely ease the movement of iron ore, but the wagon availability should improve further As all steel plants are expanding and the railways share would increase, there is a need for special attention for the rake availability, JSW Steel Ltd joint managing director Y Siva Sagar Rao said.

For the cement industry, which is expected to increase the production from 170 MT to 280 MT during the 11th Plan, the railway minister announced to reduce 14% freight rate for the movement of fly-ash that is used to produce cement. With the reduction of freight charges, the Indian Railways aims to double the transportation of cement to 200 million tonne by 2011-12, from the current 100 million tonne.

Reduction in freight rate of fly-ash is a welcome move but as on date the movement of the material through railways is not more than 5%... As a matter of fact, the railways increased the freight classification on clinker, which is an intermediary product used to produce cement, from 140 to 150 that is much higher when compared to cement, cement manufacturers association secretary general NA Viswanathan said.

Cement industry officials are hoping that down the year theres no reduction of wagons for cement movement. Last year there were several notifications after the Railway Budget, which undid the Budget announcements, he added.