1. Indian Railways comes out with freight rebate scheme

Indian Railways comes out with freight rebate scheme

Move aims at garnering additional revenue from freight traffic

By: | New Delhi | Updated: June 25, 2015 12:36 AM

In order to optimise and garner additional revenue from freight traffic, the ministry of railways has come out with a new scheme called Automatic Freight Rebate for Traffic Loaded in Traditional Empty Flow Direction.

According to a recent circular, the ministry is going to provide automatic rebate from the computerised FOIS (freight operations information system) to customers offering traffic in traditional empty flow direction (inter-zonal and intra-zonal), which will come into effect from June 25.

Except for commodities like mineral and ores, coal and coke, POL traffic, RMC traffic, military traffic and commodities falling under class LR2 and LR3 all other commodities including new commodities will be charged at class-LR1 (low rated traffic lines) for trainload traffic and at base class 100 for wagonload traffic irrespective of the terminal, commodity and customer.

“We want to compete with the roadways. This scheme will bring down the cost for transporting commodities like cement by 32%, iron and steel by 42% and fertilizers and food grains by 27%. We are expecting an additional flow of 10 million tonne by the end of this financial year and hopefully an added revenue of around R700 crore,” said a source in the ministry.

“Proper data analysis has been done and we have made sure that the Indian railways will be able to monetize on these schemes in spite of giving such heavy discounts,” he added.

In order to be eligible for this scheme, the customer will have to offer half rake of the permitted goods and should be transporting the goods for more than 200kms. The permitted wagons for this scheme are open wagons (BOXN group), Covered wagons (BCN and BCNHL group) and Flat wagons and mixed steel rakes (BRN group, BOST group and CONCORD). In addition to the commodities which are not eligible for this scheme certain commodities are not permitted to be transported between designated inter-zonal and intra-zonal divisions.

Other freight incentive schemes like Incentive Scheme for Loading Bagged Consignment in Open and Flat Wagons, Incentive Scheme for Traditional Empty Flow Direction, Incentive Scheme for Incremental Traffic have been discontinued.

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