Railways tweaks coal freight rateshttps://indianexpress.com/article/business/business-others/railways-tweaks-coal-freight-rates-5019658/

Railways tweaks coal freight rates

Lean season may become costlier: Busy season charges a part of standard tariff.

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15% busy season surcharge levied over and above the freight rate from April to June and October to March has been subsumed in the new tariff structure.

With three months to go before the fiscal ends, Railways has tweaked its freight rates for carrying coal by making certain add-on charges a part of the standard tariff in the process creeping in a marginal increase.

The 15 per cent busy season surcharge levied over and above the freight rate for nine months of the year — April to June and October to March — has been subsumed in the new tariff structure. An additional 5 per cent development charge levied on that has also been factored into the new tariff table. As a result, now there is effectively no “lean season” tariff for coal. The standard rates will apply all year round.

There is a marginal increase in certain distance slabs in the new freight rates for coal to be effective January 15, when compared with the existing rates calculated along with the two add-on charges. Sources said the overall annual impact on transport bill could be approximately five per cent for clients, if Railways does not affect a lean-season “relief” in rates for coal carried between July and September. The lean season, when coal clients do not have to pay the add-on charges, will now attract rates akin to those in the busy seasons, as per the new policy. The current freight rate and the add-on charges together work out to be Rs 198.64 per tonne of coal carried for 100 kms in a rake. That in the new rate structure is Rs 198.70. As is the tariff policy on freight, the rate does not see a flat increase and is dynamic as per various distance slabs. So in certain slabs, there is a marginal decrease as well. Between kilometer 1 and kilometer 3500, the tariff is divided into numerous distance slabs and the rate changes in each slab.

In the lean season however, the difference works out to an up to 15 per cent increase in rates as per the new tariff structure.


Railway Board Member (Traffic) Mohammad Jamshed said that there is actually no increase because the annual trend of coal transportation is such that there is hardly any “lean season” for coal anymore. “We have merely included certain charges into the tariff and it works out to be the same for clients, who anyway pay this amount to railways,” Jamshed told The Indian Express.

Power producers had been demanding this tweak from Railways for a while now to make the surcharge and other add-on charges a part of the freight rates and call it “tariff” instead of “surcharge”. This is because power regulatory authorities have been less convinced to recognise the surcharges as freight tariff in the power companies’ annual assessment of books and power tariff-fixation exercise thanks to the different nomenclature. This has been a bone of contention for the power producers.

Railways has witnessed a major boost in its coal traffic this fiscal year. By December 2017, it has carried 39 million tonnes of coal more than what it had carried by December 2016. The increase over previous year’s figures by December has doubled. Due to all the power plants generating to full capacity and throwing up steady demand for coal, the transporter is now utilising upwards of 50,000 wagons per day in freight transport and is eyeing a total of a highest-ever 1150 MT of freight carried by the end of this fiscal.