Port congestion surcharge withdrawn by Railways

NEW DELHI: Facing a decline in freight volumes, Railways has withdrawn the port congestion surcharge levied on cargo moving to inland, a move aimed at attracting imported coal and iron ore traffic.

The port congestion surcharge levy, which is 10 per cent of the basic freight rate, has been withdrawn with immediate effect, according to a railway notification issued yesterday.

The decision is in line with the Railway Minister Suresh Prabhu's promise to make rail a competitive mode of transport in comparison to roads, and will be effective till March 2017.

The move is likely to benefit companies in the coal and iron ore sectors, apart from shippers of containerised cargo.

The removal of congestion surcharge will lead to 15 million tonnes of incremental traffic in the current financial year alone, said a senior Railway Ministry official.

Railways had imposed the port congestion surcharge at 10 per cent rate on basic freight rate on all goods traffic including containers originating from ports on November 24, 2014.

Owing to the slump in the economy, railways suffered shortfall in loadings in 2015-16 fiscal.