Export goods derail rail freight income

NEW DELHI: Freight earnings of the railways from commodities, such as steel, cement and iron ore, especially meant for exports, have taken a severe blow. The Railways have lost nearly $1 billion on account of freight discount, which go up to 50% on iron ore for exports.

Container traffic on railway network has also registered up to 40% decline in the last few months, according to a Rail Bhawan official.

Global recession appears to be taking its toll on the Railways and the interim rail budget numbers , to be presented in Parliament on Friday, may reflect this downtrend. ���Conditions are not favourable. We are not de-coupled from the global slowdown. We have seen a significant dip in freight traffic, especially in the export and import-oriented categories, such as iron ore, steel and container in the October-December period,��� the official said.

Rail minister Lalu Yadav is not expected to announce any major fare and freight proposals in his interim budget in line with the convention on interim budgets. However, the Railways may tweak rates of specific commodities ahead of the budget responding to market conditions.

���Freight rates for a few commodities can be changed depending upon the possibility of it leading to an increase in traffic and earning. Our rates are linked with market conditions and as and when required can be changed,��� he said. Indian Railways earn over 80% revenue from its freight business.

Freight loading during November and December, 2008 grew by 1.29% and 3.08% to 66.62 million tonnes and 72.13 million tonnes, respectively, over the corresponding months last year. It, however, dipped by 0.13% during October in the first nine months of the current financial year. This may force full year freight growth into single digit.

During the first half (H1) of the fiscal 2008-09, freight loading growth remained on the projected lines ranging between 5-10%. In fact, barring August, when the growth slid to about 5%, in other months of H1, freight grew between 7.5% to over 10.5%.

The Railways posted 13.87% growth in revenue to Rs 57,863.90 crore in the first nine months ended December 31, 2008. While total earnings from freight went up by 14.53% to Rs 39,085.22 crore during the period, passenger revenue earnings increased by 11.81% to Rs 16,242.44 crore.