The Center is considering reducing railway freight rates for thermal coal shipped through coastal transportation by changing the price calculation under the rail-sea-rail (RSR) method. BLiTZ has received this information.
Demand for coal is expected to increase in the coming months; this move by the Centre aims at increasing coal despatches and at the same time, keeping the cost of seaborne coal less expensive.
This also comes after Finance Minister Nirmala Sitharaman in her Union Budget speech for 2023-24 made clear her intention to promote coastal shipping.
Telescopic freight i.e. journey from coal mine to port and then from destination port to power house will be treated as one consignment thereby reducing the final freight cost. At present, freight for rail transport from mine to port and from destination port to power houses is charged separately, making it very expensive.
The policy is facing some resistance from the Ministry of Railways, because coal transportation generates good revenue for the railways, to put it simply. None will welcome revenue-loss it can be understood.