Steel units seek roll back of Odisha order on mineral transport rates

They say rates due to this order are up 30% instead of being reduced, for destinations less than 100 km away

Steel companies have voiced their opposition to a recent government notification on fixation of ceiling on mineral transportation rates.

The All Odisha Steel Federation (AOSF), an association of steel units operating in the Kalinganagar industrial complex, complained that the new rate has actually hiked transportation cost for minerals by 30 per cent for destinations below 100 km.

“The rates due to this notification will increase by 30 per cent instead of reducing it (in below 100 km destinations). It is seen that there is some reduction on rates on long distance traffic, but in mineral transport, destination is mostly within 100 km where these rates have been increased by almost 30 per cent instead of reduction”, P L Kandoi, president, AOSF said in a memorandum submitted to the state chief secretary G C Pati.

 

Kandoi said, since the purpose of the notification has been defeated, it needs to be withdrawn, and a fresh notification needs to be issued after consultations with the industry representatives.

Earlier this month, the state government notified the ceiling rate for carriages carrying minerals within and outside the districts of Angul, Jajpur, Keonjhar, Sundargarh and Jagatsinghpur.

For to and fro movement beyond 100 km per day, the ceiling on freight has been pegged at Rs 6.38 per tonne per km, Rs 5.11 and Rs 4.06 for six wheeler, 10-wheeler and 12-wheelers respectively.

 

Manish Kharbanda, executive director and group head (mines & minerals), Jindal Steel & Power Ltd (JSPL) said, “After a long time, the state government has announced the uniform ceiling rate for mineral transportation which is a welcome step. However, the notification has a flawed provision for less than 100 km run per day category which will discourage the transporter to ply a second trip as two trips in a day would fetch them less returns compared to what they would get for a single trip. This is self-defeating and will have adverse effect on the raw material feeding to Odisha based industries.

As per the government notification, the maximum freight rate has been fixed at Rs  4.56 per tonne/km for six wheelers, Rs 3.65 for 10-wheelers and Rs 2.9 for 12-wheelers.

The maximum freight for locally moving trucks and tippers up to a distance of 100 km, has been pegged at Rs 2000 per day plus twice the running cost or Rs 3500, whichever is higher.