Railways up freight target by 20 mt

Higher traffic seen despite rise in carriage rates

The recent increase in freight rates has not dampened Indian Railways' confidence in attracting greater volumes. It has increased its target for freight traffic for the current year by 20 million tonnes, mainly on account of anticipated economic growth.

The Railway Board, which met last week, decided to chase 600 million tonnes (mt) traffic by the end of this fiscal instead of 580 mt estimated in the budget for 2004-05.

"The anticipated growth is mainly on account of increased iron ore and cement traffic," a ministry official said.

The Railways expected a much better performance in terms of earnings too, as a near to 9 per cent growth was achieved, without the freight rate hike, he added.

The Railways clocked a growth of 8.9 per cent during April-November, 2004 in terms of revenue and a 7.54 per cent growth in volumes, compared to the corresponding period last year.

While the freight revenues increased to Rs 18,505 crore from 16,992 crore recorded during April-November, 2003, the volumes rose to 385 million tonnes from 358 million tonnes.

The average lead or the distance over which the cargo is carried, also increased during the period April-November 2004 by 2.41 per cent, to 594 kilometres from 580 kilometres during the same period last year.

Even during the period April-October, 2004, the volumes went up by 7.68 per cent while the earnings grew by 9.3 per cent compared to corresponding period last year.

"If this kind of growth is sustained during the remaining four months of current year, we are confident of exceeding the target," the ministry official said.

The official ruled out any diversion of traffic to other modes, due to increase in freight rates from November 27, as the commodities chosen for hikes were those, which did not have multiple handling and were delivered at the door-step of the customer.

"Rail freight charges are 40 per cent of the truck hire charges despite the hike. It is only when there is multiple handling, the overall cost of transportation is higher by rail," he said.

Freight performance

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• The Railways clocked a growth of 8.9% during April-November 2004 in terms of revenue and 7.54% growth in volumes, compared to the corresponding period last year
• The distance over which the cargo was carried also increased by 2.41% to 594 km from 580 km
• The ministry recently increased the rates for carrying cargo like iron ore, coal, manganese ore and cement by 3.5-7%