Freight on diesel, petrol cut 5%, minerals 6%

Yadav proposed to reduce the classification for diesel and petrol of highest class from Class 220 to Class 210, which would bring down the freight rate for diesel, petrol and ammonia, etc by about 5 per cent thus taking the rationalisation process further. Last year fuel was reduced from Class 240 to Class 220 thereby reducing the tariff by about 9 per cent.

Demand of mineral based industries like steel and cement, freight rates for transportation of all minerals including iron ore and limestone would be charged at Class 160 in place of Class 170, thus reducing the freight rates for these commodities by about 6 per cent.

Talking of the problem the Railways faced due to empty running of wagons throughout the year, Yadav announced a discount of 30 per cent instead of the current 20 per cent in empty flow direction during peak season too. This discount would apply to both open and covered wagons in both peak and lean season for traffic with a lead of more than 700 km.

The minister said the general managers of zonal railways would be delegated powers to offer this discount on traffic with a lead of less than 700 km also, under certain conditions.

About the revised discount scheme for the bagged consignments of wheat, fertilizers and cement, the minister said that in cases of incremental loading of bagged consignments in open wagons in empty flow directions an additional Empty Flow discount at the rate of 30 per cent would be given but after giving both these discounts, the minimum charges payable would not be lower than freight payable at Class LR-3.

Thus the discount for incremental loading of cement, wheat and fertilizers in bags, in empty flow direction would now increase up to about 40 per cent.

Bagged consignments of wheat, fertilisers and cement loaded in open wagons are currently given a discount of 20, 30 and 15 per cent respectively.

The minister hoped that by giving such a heavy rebate, his ministry would be able to attract FCI and various fertilizers and cement companies to load in open wagons returning empty.

The calculation of incremental loading would be done on the basis of type of wagon. Announcing new discount schemes for wagons in empty flow direction, Yadav said in addition to block rake loading, facility would be given for loading of less than train-load traffic.

What’s in store for business

• No across-the-board increase in freight rates

• Freight rationalisation process to continue in 2007-08

• 5% cut for diesel, petrol

• 6% reduction for iron ore, lime stone

• 10% surcharge on iron ore freight on busy route dropped

• 21% congestion charge on ore traffic introduced

• Empty flow direction discount raised to 30% from 20% currently; applies even even in peak season

• For wheat, cement, fertilisers, empty flow discount up to 40%