Moneycontrol
Mar 23, 2016 09:47 PM IST | Source: PTI

Railways rationalise freight rates for shorter distance

Facing competition from road sector, Railways today rationalised the freight policy with the formulation of "merry-go-around" (MGR) scheme to increase the coal loadings from pitheads to plants.

Railways rationalise freight rates for shorter distance

Facing competition from road sector, Railways today rationalised the freight policy with the formulation of "merry-go-around" (MGR) scheme to increase the coal loadings from pitheads to plants.


The new policy effective from April 1 this year aims to generate additional revenue to the tune of Rs 500 crore in the 2016-17 fiscal.


As per the new policy, railways will charge Rs 47 per tonne for about 18 km distance per day for 2-3 trips as compared to road rates of Rs 72 per tonne for the same distance.


Explaining the details, Railway Board Member (Traffic) Mohd Jamshed said "Generally Railways carry goods on long distance travel. The MGR is for shorter distance."

He further said: "It will be like a circular rail where after loading from the pithead, it will be unloaded in the nearby plants and the rake will come back again for loading and it will continue for many times round the clock as per the requirement."

Rationalisation of freight policy was announced in the Railway Budget.


"Since it was announced in the budget as policy reforms, we have revised the rate keeping the road sector in mind," he said.


"We have discussed the issue with the stakeholders before formulating the policy. It will start immediately at Singareni Collieries," he said, adding "We are giving competition to the road sector."

He said the MGR give railways about 5 million tonne additional loading which means Rs 500 crore revenue earning in the 2016-17 fiscal.

As per the policy, MGR terminals and track will be privately owned and railways will provide locomotive, wagons and staff to operate the freight train.

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