Wednesday, October 30, 2013

Innovative measures boost Railways' freight volume

Coal, iron ore have seen dip in their traffic; cement and steel have helped Indian Railways to keep pace with its budget targets

With volume growth of six% in the April-September period, the is expected to surpass its Budget loading target for this financial year. This is in contrast to last year’s performance, when it fell short of its Budget estimate by 15 million tonnes (mt).

While key commodities such as coal and saw a two mt fall in traffic in July-September, cement and steel helped the railways keep pace with targets. officials said they expected coal traffic to pick up before the year-end.

Railway Board officials said the improvement in loading was due to various innovative methods adopted by the railways.

“We have converted the rail-cum-sea route on the eastern and western coasts into an all-rail route, which helped customers cut handling costs,” D P Pande, member (traffic), Railway Board, told Business Standard. In states such as Andhra Pradesh, Karnataka and Tamil Nadu, customers are expected to opt for this arrangement.

The move also helped boost the traffic for steel.

Other measures to increase volume growth included allowing two point rakes for the same commodity, which boosted the efficiency and fostered growth in cement traffic. “We are carrying about 15 such rakes a day,” said Pande.

For 2013-14, the Railway Budget had set a loading target of 1,047 mt, 40 mt more than the volume carried last year. To achieve the target, the railways would have to increase its loading volume four%.

In the July-September period, cement volumes recorded an increase of about two mt. The expected additional traffic from Ltd to add Rs 100 crore to the railways’ revenue and 17 mt to its volume. Fertilisers, cement, steel and urea saw a slowdown in the first six months of this financial year.

The railways’ earnings for the April-September period stood at Rs 43,458 crore, an increase of 9%. If the Budget earnings target for 2013-14 is to be met, earnings would have to see the same growth (nine%).

Former Railway Board officials said the first six months of this financial year included the lean months of June and July, when traffic and earnings typically fell.

With the 15% busy season surcharge and 1.7% component (), the railways is expected to come up with better figures in the second half of 2013-14. The FAC levied is expected to generate Rs 700 crore, which could help compensate for the increased fuel costs.

Commodity-wise freight earnings for H1, 2013-14

(in Million Tons) Coal Iron Ore PIG Iron / Finished Steel
Steel Cement Foodgrain Petroleum
13-Apr 42.96        8.90  9.27 4.62        3.33         2.72 
13-May 43.79      10.54  8.75 5.18        3.70         3.00 
13-Jun 42.33        9.82  8.23 4.15        3.60         2.96 
13-Jul 42.36        9.97  7.98 4.34        3.81         3.09 
13-Aug 39.29 9.8 7.9 4.33 3.41 3.12
13-Sept 39.75 9.97 9.14 4.38 3.19 3.17


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