Railways To Run Dwarf Containers, Inks 3 Contracts To Bolster Falling Freight Shares

Railways To Run Dwarf Containers, Inks 3 Contracts To Bolster Falling Freight Shares

To boost its falling freight share, the Indian Railways on Friday signed three long-term tariff contracts and unveiled a new policy for running double-stacked dwarf containers. The carrier also launched an integrated app called Rail Saarthi-Indian Railways which will allow passengers to book tickets, order food and register complaints, among others, from a single platform.

Through various initiatives taken by the railways in the recent past, railway minister Suresh Prabhu said the carrier aims to achieve 45% freight market share in the next two-three years from the current 30%. This comes at a time when the Prime Minister’s Office has directed the transporters to redirect 20 MT of freight from the roads to railways by the end of the current financial year, as reported by FE.

To begin with, three long-term contracts were signed between Tata Steel and South Eastern Railway; Ultratech Cement and South Central Railway (SCR); and India Cement and SCR. According to Mohd Jamshed, member traffic, Railway Board, each agreement has the potential to rake in Rs1,000 crore during the three year contract period depending on volume of freight. However, the assured earnings from these three contracts over the contract pernod period is estimated to be Rs1,450 crore. “Another 10 agreements will be signed within this month,”
he added.

The contracts have been signed under pre-determined price escalation principle customers will have to commit minimum guaranteed gross freight revenue for each year of contract with a minimum increase of 5% over previous year. The contracts will be signed for a period of three to five years. While customers will get price stability under the contract, they will also get up to 35% rebate on incremental growth in revenue and up to 5% on the total volume of traffic. Under the dwarf container policy, double-stacked containers will run under overhead wires which will have the capacity to carry 50 tonne of freight compared with 26.5 tonne through single stack container rakes. This, in turn, will double the revenue for the railways from same rakes.

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Source Link – The Financial Express

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