Bhubaneswar : The possibility of a fresh hike in mineral freight rates in Odisha has rattled steel makers and end use industries. Any rise in transportation rates would make iron ore dearer for the steel units, who are already battling steep input costs and struggling to keep operations afloat.
The State Transport Authority (STA) has recommended increase of mineral freight rates for distance up to 50 km and beyond to compensate for idle return journey. It has suggested that the maximum freight rate for six-wheelers at INR 7.3 per tonne/per km in contrast to INR 4.56, the minimum prescribed rate. Proportionate hikes have also been recommended for 10-wheelers and 12-wheelers. If the STA’s recommendations are accepted by the state government, it could imply an increase of 15-20% in mineral transportation rates, leading to significant escalation in landed cost of the raw material.
As per STA’s recommendations, the maximum freight rate for six-wheeler carriage will go up by 16% in the range of 21-50 km. For distance beyond 50 km, the maximum freight rate for six-wheeler carriage will be hiked by 14%. Likewise, the fixed component of freight for six-wheeler carriage in the range of 21-50 km would be raised from INR 1,220 to INR 1,647 per tonne, a hike of 35% if the authority’s recommendations are approved.
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