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Container train operator hauls Rail Ministry before competition panel

Container train operator Arshiya Rail has approached the Competition Commission of India (CCI) with a complaint against the Railway Ministry, after the latter introduced steep hikes in haulage charges for container operators.

The Railway Ministry, in September, raised haulage charges by 170-200 per cent for movement of heavy commodities — cement, stone other than marble, iron and steel, alloys and metals, and petroleum products — by container train operators. While the increase was initially proposed for both domestic and export-import traffic, the Ministry later exempted export-import cargo and domestic movement of ceramic tiles and white cement from the hike. The new rates are effective from December 1, 2010.
These operators pay haulage charges to the Railways for use of its locomotives, tracks and other infrastructure making them largely dependent on the Railways. For these players, the haulage charges account for nearly 70 per cent of the operating cost.
The complaint has been made under Section 4 of the Competition Act, which deals with abuse of dominant position, sources said. The CCI is considering if there is a prima facie case and, if required, will get the case examined by its investigation arm.
The Ministry's move was perceived by the operators to be ‘anti competitive' as it discouraged domestic movement of heavy commodities. The level of traffic moved by container operators pales in comparison with Indian Railways, which itself transports commodities such as cement, iron and steel, metals and petroleum products in bulk.
The difference in the scale of operation is evident from the traffic data. Between April-October 2010, the Railways carried 55.35 million tonne (mt) of cement; about 51 mt iron ore (excludes exports); 23.21 mt of mineral oil (petroleum, oil and lubricants); 18 mt of pig iron and finished steel. In contrast, all container train operators together carried a total domestic traffic of 5.7 mt during the period.

SOURCE - Business Line

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