Railways to introduce new freight policy soon | delhi | Hindustan Times
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Railways to introduce new freight policy soon

Aiming at increasing its finances, the cash-strapped Railways is mulling over introducing a new policy under which companies will pay freight charges based on their profitability.

delhi Updated: Nov 15, 2011 17:08 IST

Aiming at increasing its finances, the cash-strapped Railways is mulling over introducing a new policy under which companies will pay freight charges based on their profitability.

"We are currently studying the books of major public and private firms to ascertain their profitability in the last few years which would become the basis for different slabs within a particular freight category," a senior Railway Ministry official said.

Currently freight rates are decided on the basis of type of goods and distances travelled.

The official said, "We are looking at those companies who can pay higher freight rates (based on their profitability) without the possibility of transferring the burden to the customers."

Coal and iron ore are at present major contributors to railway freight earnings and once the differential freight tariff is implemented, it would have a direct impact on companies in these sectors.

Changes in freight model are being considered necessary as freight operations contribute to over 60% of the railways revenue.