PMO might take a call on steel freight, import price

According to the Railways' website, a company needs to pay Rs 213 to transport a tonne of coal for 125 km (kilometre) and Rs 241 for a tonne of iron ore

After pushing for tariff measures to protect the domestic steel industry, the ministry of steel has sought intervention of Prime Minister's Office (PMO) in getting a level playing field for iron ore movement through the railways - it wants the railway rate for iron ore to be same as coal. This step has been taken even as it is plans to leave the decision on extension of the minimum import price (MIP) regime to the PMO and the ministry of finance. MIP has a sunset clause of August 2016.

In January 2016, the government had imposed a minimum import price for six months on 173 products to protect domestic firms from cheaper imports. If required, the government may extend it beyond six months.

Since August last year, the steel ministry has asked the railway ministry various times to charge similar haulage rates for iron ore and coal.

It said the iron ore rate was almost 14 per cent more than that for coal. According to the railways' website, a company needs to pay Rs 213 to transport a tonne of coal 125 km (kilometre) and Rs 241 for a tonne of iron ore.

"Iron ore is classified under freight class 165. We want it under freight class 145, the same as coal," said a steel ministry official. The railway ministry in May this year abolished a policy where the haulage rate for iron ore meant for export was higher than the one meant for local use.

With the steel industry going through a severe downturn, junior steel minister Vishnu Deo Sai has already said a demand for a comprehensive package had been referred to the department of financial services.

Three months ago, the central government had extended the safeguard duty on some steel imports till March 2018 to protect the industry from cheaper Chinese supplies. However, the duty would be reduced to 10 per cent in stages over the next two years.