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Rlys fears higher classification for iron ore may hit earnings

Santanu Sanyal

Many railway stations act as the gateways to port. Some iron ore exporters, so far booking their consignments right up to the ports, may now do the booking up to the gateway stations to avoid higher freight.

Kolkata , Dec. 2

THE zonal railways transporting iron ore to various ports fear that they, instead of posting higher income as a sequel to the upward revision of the classification for iron ore booked to ports, may in fact suffer a drop in their earnings.

With effect from Thursday, iron ore booked to ports has been put on a higher class of 180 from 160. Normally, the zonal railways carrying iron ore to the ports should feel happy about it as higher classification means higher freight earnings for them. However, they fear that they may lose traffic as a result of change in classification.

The fear may not be totally unfounded. Not all the iron ore that is transported to ports is meant for exports. Some may be consumed locally, that is by sponge iron units located close to the ports. These units will be reluctant to have their raw material transported by rail any more as they will be now required to pay higher railway freight following the change in classification. To that extent, the Railways might lose the traffic.

The same is true about the coastal shipment of ore. An iron ore-consuming unit located on the west coast and receiving the mineral by way of coastal shipment through an east coast port too will no longer be interested in following the same route. Instead, they would rather prefer to have the mineral transported from the mines to the plant all the way by rail, bypassing the port and the coastal route.

Many railway stations act as the gateways to port. Some iron ore exporters, so far booking their consignments right up to the ports, may now do the booking up to the gateway stations to avoid higher freight.

There is still a fourth possibility. Take the case of South Eastern Railway (SER), which loads about seven rakes of iron ore a day, for transportation to three different ports - Haldia, Paradip and Visakhapatnam. Normally, three lines are used for iron ore transportation - Banspani line, Barbil line and Barsua line.

The first two lines being heavily congested, SER would normally urge the customers to use the Barsua line for any incremental traffic.

Since the mines are mostly located in the Barbil area, the customers will now avoid the Barsua line and transport the mineral all the way by road.

East Coast Railway, which loads about 15 rakes of ore every day - nine for Visakhapatnam port and another six for Paradip port — too fear a flight of traffic as a sequel to the higher classification of ore to the ports.

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