New Delhi: The Indian Railways increased freight rates for transporting iron ore by Rs300 per tonne, the fourth time it has done so since railway minister Mamata Banerjee presented her rail budget in February this year.
Freight rates were left untouched in the Budget, but were increased on 15 March. The last increase, issued in April, was effective for May.
Increasing freight rates outside the budget process was part of the dynamic pricing policy instituted by the previous rail minister Lalu Prasad to take advantage of seasonal fluctuations in the prices of commodities.
Iron ore contributed the most to the Indian Railways’ success under Prasad. In the five years that he was railway minister, the national transporter rode buoyant global iron ore prices, and increased the cost of transporting the commodity several times.
According to a recent white paper on the performance of the railways, the national transporter’s earnings per net tonne km—essentially a measure of how much the railways earned per tonne carried for 1km—increased by as much as 160% between 2003-04 and 2008-09.
“They have increased freight rates by almost Rs1,000 since the railway minister presented her budget,” said R.K. Sharma, secretary general of the Federation of Indian Mineral Industries.