Prasad Yadav's Railway Budget announcement will definitely
win him applauds, at least from logistics companies, after
he announced a number of cuts and discounts for freight
rates. The new freight corridor announced in the Budget,
is expected to increase the freight movement by 25 per
announced unto 30 per cent discount on non-peak incremental
freight, while there will be a 20 per cent freight discount
during the peak season, which certainly seems to be a
move to grab business. But, the key point here would be
whether traffic can actually shift, because due to the
recent Supreme Court ruling on overloading of trucks,
road traffic has dealt a little bit of a crippling blow.
So, if there is a little spill over of traffic over to
railways, then the incremental revenues can possibly accrue
to companies like BEML, Gateway Distriparks or Kalindee.
S K Hazra, MD, Aegis Logistics puts it, "As
far as chemicals are concerned, this rider will not help.
But to petroleum products, especially to the oil companies,
it maybe of some help. But it is always difficult to get
a liquid return freight."
says, "As far as the solids and container movement
is concerned, it will help the industry because these
containers can have a flexibility of having different
types of products on the way back."
announcement made by the railway minister was 8 per cent
cut in diesel and gasoline freight rates. Lalu also announced
668 million tonnes as the revised freight target for FY07,
which seems to be quite creditable, because last year
Railways carried an incremental freight of 43 million
tonnes, which was an all-time high and this time they
have exceeded even that record
and it is 66 million tonnes, more than they have done
and next year they have set a higher target of 58 million
will the road freight rates see a similar trend to compete
with the railways?
D P Agarwal, vice chairman and managing director of Transport
Corporation of India denies this. He says, "We are
already too competitive and so many times there was an
increase in diesel prices. As we move on to road, it takes
double time than railways. So we can't just drop any
someone's loss is someone's gain.
and director at Kalindee Rail Nirman, R D Sharma believes
it was a good budget. "My company has definitely
benefited because we are the pioneers in this field and
we are doing very well. So we will definitely benefit
by getting more projects," he says.
incremental loading, extra loading, there will be a discount,
15 per cent last year and this year it is has been increased
to 20 per cent. The loading target for FY07 is set at