Movement of containers on trains is set to get costlier again with the Railways not withdrawing the nine per cent haulage rate hike, which will come into effect from February 1. Container Corporation of India (Concor), the largest container train operator accounting for over 70 per cent of the market, has already decided to hike charges with effect from February 1. The extent of increase varies based on weight, distance and routes. This is the second increase for Concor’s customers in the last two-three months. This follows the Railway Ministry’s move to hike the rail haulage charges.
Haulage charge is paid by container train operators (CTOs) to the Railways for using the tracks, locomotives and signalling systems. Haulage charges account for about 70 per cent of the operating cost for CTOs.
The Railways had decided to increase haulage charges by up to 31 per cent in two instalments — 22 per cent from December 1, and another nine per cent from February 1.
The Association of Container Train Operators (ACTO) has launched a protest against the Ministry’s move. ACTO comprises firms such as Gateway Distriparks, Freightstar, APL-India Infrastructure, Kribhco Rail Infrastructure, and Hind Terminals. It said it had been assured by the Railway Ministry that haulage rate hikes would be tempered.
Concor’s Managing Director Anil Gupta told Business Line that the company was facing strong resistance from its customers for the second round of hike. Container train operators maintained that they had already started seeing diversion of cargo from rail to road in the domestic segment.
No level field
In a strongly-worded statement, ACTO accused the Railways of treating the CTOs unfairly against Railways’ own bulk cargo.
The association has demanded that the Government set up a rail tariff regulatory authority fast to bring rationality and transparency in all rail freight pricing matters.
“The step-motherly treatment meted out to private investors is (evident as) rail haulage charges have been increased eight times during the last seven years since the market was opened up. This resulted in a cumulative increase of 73-128 per cent in different weight slabs,” said ACTO.
“In contrast, the tariff for transport of bulk cargo by rail, in which Railways’ investment goes, has increased by a mere 32 per cent over the same period,” claimed ACTO.
The CTOs have already started experiencing diversion of cargo from containers to road as the recent diesel price increase has had a very marginal impact on the road rates.
In 2006, the Railways opened up containerised movement for private sector, after which over 15 firms entered the segment.
The private investors invested over Rs 4,000 crore in wagons, containers and terminals in addition to Rs 650 crore as licence fee.