Indian Railways has raised transportation charges for cement, coal and coking coal by up to 8 per cent. The Railway’s move would increase the input cost of housing, power and steel sectors that have been identified for special focus by the government. 

The cement industry said that this could lead to, on average, around Rs one per bag increase in transportation cost of the construction material, thinning the relief to consumers that could have resulted from yesterday's 4 per cent excise duty cut.

Cement Manufacturers Association President H M Bangur stated, “The hike comes as part of Railway's revision of classification of cement from class 140 to class 150 and coal and coke from class 140 to class 150 for trainload movement. It is a very complex situation. The increase in freight rates by the Railways has compounded the entire thing. We are still working on how to address the issue." 

Puneet Goel of KPMG advisory services said, “Cost of thermal coal is less than the transportation cost for state power generators in the northern region, where coal may be transported from about 1,000 to 1,500 kms. Railways freight on coal, typically, costs about Re 1 per tonne per km, which can result up to Rs 1,500, whereas cost of coal is between Rs 500 and 750 (Grade F) thermal coal.” JSW Group CFO Seshagiri Rao said, “The move will put pressure on all the companies operating in the infrastructure sector. If coal and coke cost goes up, our cost goes up."