Thursday, April 3, 2008

Indian Railways makes 65% of its revenue from goods traffic

by Jo Black

The turnaround growth story of the Indian Railways, the largest public sector enterprise, has been highly dependent on coal and iron ore for export, the freight earnings arising from which account for maximum of one third its total revenues, according to findings of The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

In an ASSOCHAM Eco Pulse (AEP) Study, while the freight earnings account for 65.2 per cent of the total revenues of Indian Railways, the majority share of this is contributed by coal (37.4 per cent) and iron ore for export (14.67 per cent).

The study also reveals that Coal and iron ore for export have been the major drivers of goods earnings, which are expected to register a turnover of Rs. 178.7629 billion ($4.7 billion) and Rs. 70.0441 billion ($1.84 billion) respectively by the end of this fiscal, contributing heavily to the total freight income of Rs. 477.43 billion ($12.5 billion).

The Railway industry needs to effectively diversify its freight commodity basket in order to insulate itself from the sectoral risks and maintain its growth momentum, said Mr. Venugopal N Dhoot, President, ASSOCHAM.

The month of February 2008 saw an increase of 23.3 per cent with total goods earnings recorded at Rs. 44.0422 billion ($1.15 billion) compared to Rs. 35.7162 billion ($0.93 billion) in the corresponding period last year. Maintaining the trend, coal contributed a major share in the total earnings amounting to Rs. 16.1094 billion ($423 million), followed by transportation of iron ore with Rs. 7.4834 billion ($196.9 million) and Rs. 3.5819 billion ($94.2 million) from foodgrains.

The robust performance from the goods revenue has been mainly on account of the increase in the volume of goods traffic with coal taking a major share of 338.35 million tonnes followed by the transportation of 136.17 million tonnes of iron ore while the total tonnage estimated to be 790 million tonnes for the FY 2007-08.

 

 

 

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