Conceding to the long standing demand of industry, railways has abolished the dual freight rate policy for transportation of iron ore
"As per the decision, we discontinued the dual freight rate and now both domestic and export rate is same. The decision is likely to result in a boost to the loadings of iron ore," said a senior Railway Ministry official today.
Iron ore export freight rate is about 25 to 30 per cent higher than the domestic transportation rate depending upon the distance.
Under the dual freight policy, transportation costs for iron ore or iron ore pellets meant for export were higher than that for loadings meant for domestic use.
The dual rate had not helped railways with several unscrupulous traders diverting stocks marked for the domestic market to ports for export.
According to the railway circular, "The dual freight policy applicable for transportation of iron ore and iron ore pellets is discontinued. All types of iron ore and iron ore pellets, whether meant for domestic consumption for manufacture of iron and steel as well as cement or meant for other than domestic consumption, will now be charged at Class-165 (Trainload),"
The move is part of the reform measures unveiled by Railway Ministry to boost falling freight volumes.
The Comptroller and Auditor General of India (CAG) had in May 2015 observed the government lost Rs 29,000 crore over five years as a result of the dual rate policy, unearthing the iron ore freight scam.
The new freight rates came into effect on May 10 and will remain in force till March 31, 2017.
