Grinding halt for ‘royal’ train soon?

After changing its colour thrice since its launch, the Royal Rajasthan on Wheels (RROW), a super luxury tourist train that can barely break even during its run, now looks at getting its haulage model changed. The fixed haulage charges, now applicable to luxury trains, are highly exorbitant.

Following a letter by chief minister Ashok Ghelot to railways minister Pawan Kumar Bansal, chief secretary C K Mathew and officials from the Rajasthan Tourism Development Corporation (RTDC) are slated to meet member traffic, Railway Board at New Delhi, in this regard.

‘Royal Rajasthan on Wheels’ – touted as India’s most luxurious train – is a joint venture between RTDC and Indian Railways. At the moment, the Rajasthan government owes Rs 30 crore haulage charges to the ministry and with RTDC running in losses, it seemed adifficult thing to run the train on the current model.

In 2010, the railway board had increased haulage charges from Rs 1,000 per kilometre to Rs 2,000. If the RTDC had paid Rs 30 lakh per trip as haulage charges, it has to pay nearly Rs 60 lakh per trip now. While the railway board had offered a discount of 40% since 2011, the objective of the meeting would be to negotiate with the board to consider extending the discount by two more years i.e. till 2009 when the RROW was flagged off. The RROW which is parked for the season is said to have run on 50% capacity last season and generated Rs one crore which barely covered running expenses and commissions to general sales agents (GSAs). For the next season, only 25 per cent tickets are booked.

“The haulage charges are exorbitant and we plan to propose to the railways to run the train on revenue sharing basis as the Palace on Wheels (POW). While railways get 56% of the revenue, Rajasthan’s share is 44% is far more logical,” said Vinod Ajmera, managing director of RTDC. Besides there would also be discussion on POW coaches overhauling, he said. The average life of the train coaches is 18 years but POW has already done 18 years, well past its life.

Unlike POW which has been running on fixed itinerary for years, RROW has since its inception been a “victim of officials and politicians’ whims and fancies”. A stark example is when the train was running in losses, it changed its colour thrice. “Initially, it was painted golden to reflect the colour of the sand. This was when BJP was in power. In late 2008, Congress came to power and with it the train’s colour was changed to dark yellow. And then, the train’s colour was changed to blue. Initially, the RTDC was reluctant to change the colour since it had already bought yellow paint. But the train finally had to be painted blue at a cost of over Rs 4 lakh to the RTDC at a time when the train was incurring a loss of Rs 5 crore every season,” a source said.

Moreover, while POW for years maintains the same well-researched itinerary, RROW is now contemplating changing the itinerary, which will also be one of the issues listed on the agenda of the meeting.

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Box train operators partially absorb rate hike under pressure

Faced with competition from within the container train segment, as well as the road sector, container train operators have been forced to absorb part of the haulage rate hike, which set in from December.

The Indian Railways increased haulage charges, which account for 60-70 per cent of operations cost for the train operators, by up to 22 per cent from December 1.

Container operators pay haulage charges to Indian Railways for their carrying their containerised cargo and flat wagons. There are 15 players in the segment, with incumbent Concor holding 75 per cent of traffic.

PARTIAL INCREASE

Container Corporation of India (Concor), Gateway Distriparks, APL-backed IIPL and MSC-backed Hind Terminals have increased container train movement tariffs in certain segments such as Ludhiana-Mundra, and Ludhiana-JN Port. But tariffs have not been increased in routes such as Kanpur-Mundra where the competition is high.

Concor has passed on less than 50 per cent of the total increase in cost it faces due to haulage rate hike.

“Given our nature of traffic mix, we would have had to pay Railways eight per cent extra haulage charges. Out of that, we have passed on 3.5-4 per cent increase on an average,” said Anil Kumar Gupta, Managing Director, Concor.

Gupta said it would be difficult to share route-specific data as it 638 streams where it operates. “We have partially passed on the hikes in specific routes based on the competition from other operators,” said L.R. Thapar, Chief Executive Officer, Hind Terminals.

STABLED RAKES

The hit has been hard for some entrants such as Kribhco Rail Infrastructure, which has stabled five rakes out of the eight it operated, because the operating losses were higher than the losses it incurred by just parking the rakes in sidings.

This is similar to that of shipping lines and airlines, who resort to keep their rolling stock capacity idle in slowdown instead of running regular services and booking losses.

“Most of our customers did not agree to take the entire hike. Some agreed to take the hike for loaded containers only,” said B.N. Shukla, Managing Director, Kribhco Rail Infrastructure.

Other players with focus in domestic segment that have stabled rakes include Arshiya Rail and Inlogistics.

TRAFFIC IMPACT

Since the cargo for container movement in December was already booked before the hikes were effected, impact on traffic volumes will be clear only by January, said Amitabha Chaudhuri, who heads NOL’s APL India Infrastructure.

APL’s IIPL passed on most of the rate hike to customers. Concor also stated that it is early to gauge any shift in containerised cargo movement between rail and road. “There is a strong resistance from the customers, who are already under pressure due to the general slowdown,” said Gateway Rail Freight Ltd’s Deputy CEO Sachin Bhanushali.

The potential exception could be lightweight containers, where there may be a shift from road to rail. “In line with the railways introduction of 0-10 tonne category, for which haulage charges are lower than the earlier 0-20 tonne category, we have dropped charges,” said Concor’s Gupta. This lightweight category of cargo comprises less than five per cent of container train traffic. At present, most of these lightweight boxes, which carry garments, consumer durables, spices and tyres, move on road.

EXIM BOXES

With the domestic business already under pressure, most container train operators had shifted focus to the export-import business of container movement, which is a relatively high margin business.

But, this year, the export-import container movement is also under stressed, as is evident from the port’s container handling data. For the April-November period of current fiscal, all major ports together handled 5.16 million teus, which is 0.6 per cent lower on a year-on-year basis.

Most of the key container ports – JN Port, Chennai and Pipavav Port – have handled lower number of containers during the period on a annualised basis. The only exception is Adani Port’s Mundra Port, which has seen a double digit growth in containers handled.

Railway food prices to go up

Foodgrains, vegetables and fruit, among others, will be costlier because the Railways has decided to increase haulage charges for container train operators by 31%. Pawan Kumar Bansal is expected to elaborate on the decision in his first formal interaction with the media as railways minister on Wednesday.

Haulage charges, which container train operators pay the Railways for using the tracks, signalling systems and locomotives, will be increased in two stages — in December this year and February 2013.

A train’s cost of haulage from Delhi to Mumbai is currently Rs. 15,690. From February 1, it will be Rs. 20,590. Other essential commodities likely to be impacted include Basmati rice, soyabean, almonds and apples, besides garments, electronic goods, handicrafts, machinery and newsprint.
http://articles.timesofindia.indiatimes.com/2012-11-21/nagpur/35257857_1_pantry-car-poor-quality-food-deputy-station-superintendents
“We are demanding a rollback,” said Amitabh Chaudhary of the Association of Container Train Operators (ACTO).

The decision to hike passenger fares is likely to be kept on hold for the time being.

A second Shatabdi train from Delhi to Chandigarh and the flagging off of 20 trains are among other announcements Bansal is expected to make.

http://www.hindustantimes.com/India-news/NewDelhi/Railways-hike-may-push-up-food-prices/Article1-962096.aspx

Published in: on November 25, 2012 at 8:11 am  Leave a Comment  
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Railways hike may push up food prices

Foodgrains, vegetables and fruit, among others, will be costlier because the Railways has decided to increase haulage charges for container train operators by 31%. Pawan Kumar Bansal is expected to elaborate on the decision in his first formal interaction with the media as railways minister on Wednesday.

Haulage charges, which container train operators pay the Railways for using the tracks, signalling systems and locomotives, will be increased in two stages — in December this year and February 2013.

A train’s cost of haulage from Delhi to Mumbai is currently Rs. 15,690. From February 1, it will be Rs. 20,590. Other essential commodities likely to be impacted include Basmati rice, soyabean, almonds and apples, besides garments, electronic goods, handicrafts, machinery and newsprint.

“We are demanding a rollback,” said Amitabh Chaudhary of the Association of Container Train Operators (ACTO).

The decision to hike passenger fares is likely to be kept on hold for the time being.

A second Shatabdi train from Delhi to Chandigarh and the flagging off of 20 trains are among other announcements Bansal is expected to make.

http://www.hindustantimes.com/India-news/NewDelhi/Railways-hike-may-push-up-food-prices/Article1-962096.aspx

Published in: on November 25, 2012 at 8:03 am  Leave a Comment  
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Rail movement of containers to get costlier by 31% in 2 stages

Moving goods in container trains may get costlier.

The Indian Railways — which moves 77 million tonnes of goods via containers every year — has decided to increase haulage charges for container train operators by up to 22 per cent with effect from December.

That’s not all. There will be another round of increase after two months. Thus, with effect from February the charges will go up by up to 31 per cent against today’s levels.

Haulage charges — which container train operators pay Indian Railways for using the tracks, locomotives and signalling infrastructure — account for 60-70 per cent of their operating cost.

The Ministry permitted 16 outfits to run container trains. They include listed companies such as Container Corporation of India (Concor), Arshiya International, Gateway Distriparks Ltd; and those backed by shipping lines such as Hind Terminals and APL India Infrastructure.

HIKE IN THE OFFING

The hike varies depending on weight. For moving empty containers on flat wagons, or flat wagons without containers, the hike is 22 per cent from December, and 31 per cent from February 1. Due to India’s export-import imbalance, operators have to increasingly move empty containers on the route.

The Railways has also introduced a 0-10 tonne weight, which will be charged at close to current 20-tonne level charges.

IMPACT

The operator margins will be hit, while some of the hike will get passed on to the customers. Shocked by what it called the double-whammy, the Association of Container Train Operators (ACTO) said both the export-import and domestic business will be badly hit due to the hike.

“Announcing two rounds of hike to be implemented in two months is unprecedented. We have decided to approach the Ministry for lowering it,” said Amitabha Chaudhuri, General-Secretary, ACTO. Chauduri also heads the NOL’s APL IIPL.

On whether Concor will pass on the hike to its customers, Managing Director Anil Gupta said that tariff review will be done on a selective basis for specific routes as customers cannot be driven away.

Gateway Rail Freight Ltd’ Deputy CEO Sachin Bhanushali said that some of the hike will have to be passed on to customers. The 10-20-tonne container business will move to road if the entire hike is passed on, he said.

mamuni.das@thehindu.co.in

http://www.thehindubusinessline.com/industry-and-economy/logistics/rail-movement-of-containers-to-get-costlier-by-31-in-2-stages/article4106136.ece