With a dip in the freight traffic volume resulting in massive financial losses to the Indian Railways, the Centre has decided to withdraw the levy of Port Congestion Surcharge in order to attract imported freight traffic including Containers, Coal, Iron ore etc which currently has been diverted to road.
A railway notification on Thursday said that the port congestion surcharge levy, which is 10 per cent of the basic freight rate, has been withdrawn with immediate effect. The decision is in line with the Railway Minister Suresh Prabhu’s promise to make rail a competitive mode of transport in comparison to roads, and will be effective till March 2017.
The move is likely to benefit companies in the coal and iron ore sectors, apart from shippers of containerised cargo. A senior railway official said that the removal of congestion surcharge will lead to 15 million tonnes of incremental traffic in the current financial year alone.
He said the demand in this regard had been raised by the ministries of shipping and ports and steel and also by container operators and other industries. “This will give a big boost to national industrial growth. The surcharge withdrawn was 10 per cent of basic freight and its withdrawal will generate about 15 million tons of incremental traffic,” said the official.
Railways had imposed the port congestion surcharge at 10 per cent rate on basic freight rate on all goods traffic including containers originating from ports on November 24, 2014. Owing to the slump in the economy, railways suffered shortfall in loadings in 2015-16 fiscal.