Financial Daily from THE HINDU group of publications
Sunday, Feb 27, 2005
Commodities freight charges to be on volume basis
New Delhi , Feb. 26
IN an attempt to use its existing freight capacity better, the Indian Railways has decided to move to a new system of charging commodities on a volume (total wagon capacity) basis.
This is against the existing system of charging users on the basis of the actual weight loaded on wagons.
Explaining the new system, a senior Railway official sought to draw an analogy with transporting passengers in a taxi.
"In a taxi, the operator charges the same rate whether he carries two people or five people. In our existing system, we charge on a per person basis, which means we charge less if we move two people as against five in the same taxi," he pointed out.
What is proposed now is to move to the regular taxi service model in the case of wagons.
For each wagon, the Railways has a standardised space or volume, and certain carrying capacity in terms of weight, which is about 58 tonnes per wagon. But, lightweight commodities used to fill the standardised wagon space, even though the corresponding weight was less than 58 tonnes.
For example, only about 12 tonnes of motor vehicles or 38 tonnes of potatoes took the entire space in wagons, said an official.
Given this fact, Railways used to charge lightweight commodities at a relatively higher level on a per tonne basis.
However, in this Budget, Railways has proposed to reduce tariffs on a per tonne basis for 31 light weight commodities - by about 62.5 per cent for motor vehicles, 30-55 per cent for various grades of paper, 31 per cent for jute, among others.
Users are now required to pay for the carrying capacity of 58 tonnes, even though the wagon gets filled with much less weight of the commodity.
Other commodities included under this scheme are paints and polishes, edible oils, cotton and other textiles, fireworks and timber.
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