Untitled Document
Excon, Excon 2011 Biggest Construction Equipment Trade fair India.
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www.epcworld.in
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Railways |
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| 8/25/2009 5:34:00 PM |
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The Indian Railways has imposed Rs 200 per tonne distance surcharge on movement of iron ore meant for exports following a pickup in international demand, as it seeks to maximize revenues from the commodity. The new rates are effective from August 7, 2009 said a senior Railway Board official.
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Nearly 50% of iron ore produced in the country is exported. In a robust demand situation, the railways can charge more from iron ore exporters as it faces little competition from the road sector on transporting this bulk commodity to ports.
The changes have been done under the dynamic pricing formula being practised by the railways. Now that the international market is up and the freight mobilisation has increased, the levy of distance surcharge would increase the railways revenues.
The industry is, however, unhappy with the levy.
“We had proposed a reclassification of rail freight for iron ore to 160 from 180, which could have brought down freight cost by Rs 250/tonne. Instead, the railways have imposed Rs 200-per-tonne distance surcharge. All these would severely impact ore exports,” said Federation of Indian Mineral Industries secretary-general RK Sharma.
He said railway freight constitutes almost one-third of the total cost of iron ore. This works out to around Rs 1,200 per tonne price of iron ore.
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