New Delhi: The Railways has asked its premium freight customers, those whose business with the national transporter in a fiscal exceeds Rs 500 crore, to make advance payments for their 2020-2021 operations, officials said Tuesday, in a bid to ensure that the beleaguered carrier ends the current financial year with a healthy balance sheet.
Last year, this financial engineering had brought in an additional revenue of Rs 18,000 crore for the railways under the ‘Freight Advance Scheme’, which offers its premium freight customers tariff certainty for the entire fiscal and priority in rake allocation. The advance payment has to be made by March 31, 2020 to avail benefits for 2020-2021 fiscal, a policy document on the matter said.
“This is not just about earning additional revenue, but also building a relationship and ensuring continued business from our major customers. This also ensures that we don’t lose them to the roadways. We are giving our major customers benefits under this scheme which they will otherwise not get. It’s just a business. Zonal railways have sent out letters encouraging them to avail the scheme,” a senior railway official said Tuesday.
In 2019, the NTPC, which has a business of Rs 8,557 crore with the railways, made an advance payment of Rs 15,000 crore, while the Container Corporation of India (CONCOR) made an advance payment of Rs 3,000 crore (its business with the railways is Rs 3,729 crore).
Sources say that two private entities have shown interest in the scheme for the 2020-21 fiscal and will sign the dotted lines soon.
Around 50 freight customers had a business of Rs 500 crore or above with the railways in the previous calendar year, and hence, they are eligible for the scheme.
Central and state government organisations generate the most revenue for railways through freight loading.
Private entities like Ultratech Cement (Rs 2,773 crore), Jindal Steel and Power Limited (Rs 1,527 crore), Bhushan Steel (Rs 1,492 crore), Vedanta Limited (Rs 1,104 crore), Adani Power Maharashtra Ltd (Rs 798 crore) and Ambuja Cement (Rs 614 crore) are also among the railways’ Rs 500-crore plus premium customers’ list.
Agencies