Coal news and updates

Days before the surge pricing experiment was announced, the Railways tweaked its tariffs for carrying coal

 

Dovetailing the Railway Budget into the Union Budget is one thing, but divorcing the Indian Railways’ administrative decisions and its finances from the political realm would need a whole lot more steamrolling as reflected in the reaction to its surge pricing experiment for premium passenger trains.

 

The Railways’ scramble for ideas to enhance revenues by “every single penny” possible in the middle of the year has no doubt been triggered by an unanticipated dip in gross earnings in the first five months of 2016-17 that are about 13 per cent off Budget targets and five per cent lower than the same period a year ago.

 

Passenger traffic volumes have been flat, but earnings from freight operations that account for about two-thirds of Railways’ revenues, have dropped about 10 per cent from a year ago. Apart from the tepid performance of core industries such as steel and cement in recent months, the biggest pain for the Railways’ balance-sheet is emanating from the power sector which has otherwise been painted as a success story by the NDA government.

 

Cement rates spike by 80 per bag

Cement prices increased by about Rs 80 per bag during the last two weeks in the port city. A cement bag weighing 50 kgs, which was sold for Rs 300 15 days ago, now costs Rs 380.

According to sources, around two lakh tonnes of cement per month is consumed by the construction sector in the port city. Construction industry sources said around 20 kg of cement is needed per square feet for apartments while for construction of individual houses, the requirement is around 40 kg per sft. For every 1,000 sft, there is an expenditure of around Rs 80,000 in the construction of buildings related to cement alone, sources said.

"The hike in cement rates is caused by an artificial scarcity that has been created by vested interests. This keeps happening at regular intervals and there is no action against anybody when the cement prices increase all of a sudden," noted a builder from the city. He said, "The prices slowly started increasing from two weeks ago and now all of a sudden it has touched Rs 380."

Referring to the artificial hike, Vizagapatam Chamber of Commerce and Industry president AV Monish Row in a letter to Prime Minister Narendra Modi said, "The recent order by The Competition Commission of India imposing more than Rs 6,700 crore penalty on 11 cement companies for cartelisation is as big a fraud as any in the recent past. The Builders Association of India filed a case against the Cement Manufacturers of India (CMA) way back in 2010. But it was an 'OPEN' secret for the last 20 years that Indian cement companies had formed cartels and were either fixing the prices or controlling production to keep prices high. Cement being one of the key ingredients in the growth of the economy, needs to be free of this cartel-lead pricing. In AP, the offtake of cement has not gone up recently. However, the prices of cement have jumped Rs 80/90 per bag in last few weeks! Beats all laws of economics!"

SOurce: TOI