Lower earnings from fright traffic has prompted the Indian railways to provide concession for long-distance haulage of coal.
In a circular issued on 30 Jun’20, the railway board has decided to grant 20% concession on national tariff rate for coal transportation over a distance of 1400 km. The provision is incorporated with an aim to attract additional coal movement by offering competitive freight pricing.
The directives have come into effect from 1 Jul’20 and would be valid till 30 Jun’21.
Some other important aspects of the reform are listed below:
* The concession would be applicable only for train load traffic.
*No other adjustment would be entertained concurrently along with this discount, except concession of 6% on freight booked to and from North East region.
* Besides, tariff that avails discount under TEFD (Traditional Empty Flow Directions) would not qualify for this scheme.
Relief for coal consumers:
Coal India Ltd had been pleading to the government to lower the freight rate for coal transportation, in order to ease the financial burden of consumers that were seen shying away from taking additional coal volumes.
Moreover, the tepid demand has also affected railways business involving coal.
Data provided by railways indicate that coal handled in the first two months of FY21 (Apr-May’20) have decreased 33% y-o-y to 71.55 mn t against 106.07 mn t in corresponding period of previous fiscal. Besides, its earnings from coal freight also saw a fall of 44% y-o-y to INR 5778 crore in the same period.
The concession offered will considerably save cost for consumers who have been facing COVID-19 induced financial troubles since Mar’20.
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