The Railway Ministry will try to work out a “sustainable level” of haulage charge regime for container train operators (CTOs). This is despite the Comptroller and Auditor General (CAG) recently frowning on the Railways “under-charging” the CTOs.
Haulage charge is the amount paid by CTOs to Indian Railways for using the rail infrastructure such as tracks, signalling system and locomotives.CTOs, including Concor, Arshiya, Kribhco, and InLogistics, have for long been asking the Railways to cut tariffs.
The domestic business of many CTOs has been hit due to the Railway Ministry increasing haulage charges of heavy commodities since December 1, 2010.
For instance, for the quarter ended June 2011, Concor registered a 43 per cent dip in profit before earnings and interest in the domestic segment.
The earnings from the domestic segment also dipped by nine per cent for the quarter ended June 2011 against the corresponding period last fiscal.
The CTOs have been demanding that the Railways reduce haulage charges. In fact, two CTOs - Arshiya Rail and Kribhco - have even dragged the Railway Ministry to the Competition Commission of India on this issue. The CAG report rapping the Railway Ministry for not charging high haulage charges to CTOs raised concerns in the industry on whether the Ministry will still consider its demand for lowering the charges.
“The present policy of allowing container train operators to participate in lifting of bulk traffic that conventionally belonged to the Indian Railways needs to be reviewed… on the priority including sub-optimal tariffs charged as at present, as these would cause recurring losses to the Railway while, at the same time, unjustly benefit the container train operators,” CAG has stated in its report tabled on August 5, for the year ended March 2010.
A Government source said the Railway Ministry was trying to work out a “sustainable level” of haulage charges for the CTOs. “The idea is to work out a solution so that the Railways' cargo is not cannibalised,” said the source. The source, however, was unwilling to give a time line for the decision. With effect from December 1, 2010, the haulage charges went up for domestic movement of heavy commodities — such as cement (except white cement), stone other than marble and ceramic tiles, iron and steel, alloys and metals, and petroleum products — by CTOs.