NEW DELHI: In order to attract imported freight traffic including containers, coal, iron ore diverted to road, Indian Railways has decided to withdraw the levy of 10 percent port congestion surcharge with immediate effect. This was a pending demand of the Ministries of Shipping and Ports, Steel, Container Operators and other Industries.
According to railways, the move will be a big boost to national industrial growth and its withdrawal will generate additional incremental traffic.
Due to the prevailing economic situation during the later part of the FY 2014-15, there had been a burgeoning growth of import traffic at ports, particularly of iron ore, thermal coal, fertilizer and containers and a congestion surcharge of 10 percent was imposed on all traffic including containers originating from ports.
“The situation has since changed with the congestion levels at almost all ports having come down due to a significant drop in import of thermal coal, iron ore, fertilizer and container traffic in recent months. The pendency of demands at ports has come down drastically prompting Railways to withdraw the port congestion surcharge with immediate effect,” said railways.
Over the past few months, there had been a persistent demand from the industry and concerned nodal ministries to consider withdrawal of the 10 percent congestion surcharge on the grounds that it was having a very significant impact in the logistics cost and was leading to diversion of traffic from the more environmental friendly rail mode to road, also precipitated because of falling prices of diesel.
The withdrawal is expected to give respite to the industry in bringing down logistics costs and thereby attract increasing volumes of traffic to the rail mode.