It costs more to transport a tonne of iron ore from Jamshedpur to Mumbai than it does to ship it from Mumbai to Rotterdam. Even if transported by the cheapest mode of internal conveyance, the railways, the cost of moving a tonne of the metal within the country, at Rs 1,700, is almost double the cost of carrying it to the distant Netherlands port.The reasons:• Lack of integrated bulk handling capacity• Poor rail infrastructure — low carriage and rake capacity, and shortage of wagons• Uneconomical road options • Indian ports being ill-equipped to handle bulk commoditiesWhat makes internal freight transport in India more expensive against other countries is lack of integrated bulk handling capability for heavy commodities like iron ore. In Australia, for instance, the cost of transporting a tonne of ore by rail over a distance of 100 km is Rs 40. In India, the same costs anywhere between Rs 200 and Rs 300.The country’s poor rail infrastructure is another reason. “In India, a rake can carry just 3,000 tonnes of iron ore on an average, whereas in Australia, each rake can carry 29,000 tonnes,” says R K Sharma, secretary general, Federation of Indian Mineral Industries. “Such fragmentation increases costs.”Poor rake capacity in India is a problem of technological constraints. The current loop length — the size of a parallel railway track where a train can temporarily stop to allow the passage of another train on the primary rail line — is ill-equipped to harbour a train that has more than 60-70 wagons on an average.Additionally, rail freight rates of goods like iron ore are high in India. Says K L Thapar, director, Asian Institute of Transport Development: “There is an element of cross-subsidisation as passenger fares have to be kept low. If the price of iron-ore is increasing in the market, the railways will increase the freight rate as well.”Shortage of wagons for transporting ore and poor connectivity to smaller mines is another area of concern. “Since there are no loading and unloading stations or adequate sidings near many of the small mines and ports, one has to resort to transportation by trucks. This increases costs of transportation by Rs 200 per tonne,” says an official from Sesa Goa, one of the leading private exporters of iron ore. The outcome of insufficient rail connectivity has further escalated costs by increasing dependence on roads. Sesa Goa, for instance, transports half its ore from Orissa’s Barbill mines to Haldia and Paradip ports by roads due to poor wagon availability which costs more — transporting a tonne of ore from Barbill to Haldia costs Rs 613 by rail, the same costs Rs 1,050 by road.At the end of the transport cycle lie the ports, which are not equipped to handle such bulk commodities efficiently. “Only three Indian ports have the capacity to handle a cape sized vessel (of 80,000-175,000 deadweight tonnage), which is best equipped to carry heavy ore,” says Ravi Iyer, manager, Feedback Ventures, an infrastructure consultancy firm. “Further, out of 11 ports, only six have mechanisation facilities.” So, while a Brazilian or an Australian port manages to load between 10,000 to 15,000 tonnes per hour, an Indian port manages just 4,000 tonnes per hour.Tomorrow: The solutions
