New schemes, sans details, meant to take custom away from road transport
As expected, Mamata Banerjee has announced no increase in freight rates. Rather, she decreed a decrease for kerosene and foodgrains.
While she announced schemes aimed to bring business from road transport, the railways’ growth projection for the next financial year is only a bit over 6 per cent, less than the 6.8 per cent it achieved in this financial year.
Freight carriage grew 6.8 per cent to 890 million tonnes in this financial year, overtaking the budget estimates for the year, pegged last year at a growth of only 5.8 per cent, to 882 mt. Revenue earnings increased by 9.8 per cent to Rs 58,715 crore for 2009-10.
| NUMBERS-SPEAK | |||
| Commodity | 2008-09 (Actuals) | 2009-10 (Revised) | 2010-11 (Budget) |
| Coal | 369.63 | 399.44 | 426.27 |
| Iron & Steel | 28.58 | 3050 | 33.15 |
| Cement | 86.24 | 92.5 | 99 |
| Fertilisers | 41.35 | 44.82 | 47.82 |
| Petroleum products | 38.08 | 39.71 | 40.82 |
| Figures in Million Tonnes Source: Budget papers | |||
Freight earnings were primarily driven by a 31.8 per cent increase in revenues from transport of fertiliser and an over 17 per cent increase from cement and iron and steel. Revenue from supply of iron ore for exports fell 6.6 per cent. That from transportation of miscellaneous goods went down by 43.5 per cent.
As noted earlier, Indian Railways (IR) are targeting a modest growth of a bit over 6 per cent, to carry 944 mt of goods in 2010-11. It is aiming to increase earnings by 23.4 per cent, to Rs 62,489 crore.
IR sees an increase coming from the power and steel sectors. And, set an increase in carriage of coal at 7 per cent and iron and steel at 10 per cent. It also sees an increase of 7.6 per cent in cement and 6.8 per cent in fertiliser. Plus, a target of over 5 per cent increase in carriage of iron ore for export, though this declined by 6.6 per cent in the current year.
To control increasing food inflation, Banerjee said she was lowering freight rates for kerosene and foodgrain by Rs 100 per wagon. However, analysts feel this would not make much difference to prices. It would, however, cost IR Rs 2 crore extra each month.
She announced new schemes like a door-to-door service and a possible tatkal service for freight, to take away custom from road transport. “One rake of road-cum-railer vehicle will be introduced on trial basis. Also, a premium tatkal service for parcel and freight movement is under consideration,” she told the Lok Sabha.
“Brilliant schemes, if the railways is able to implement it. I have doubts over implementation,” said Manish Saigal, executive director at KPMG.
Among other initiatives are to build automobile and ancillary hubs at 10 locations and examine ‘the need for special wagons for iron ore, fly ash, automobiles, etc’.
The railways will also introduce a ‘modified wagon investment scheme for high-capacity general purpose and special purpose wagons’. And, permit private operators to invest in infrastructure, on the lines of container train operators, and run freight trains for commodities such as automobiles, vegetable oil, molasses, chemicals and petrochemicals, and bulk traffic like fly ash and cement. The details are to be notified shortly.
