Railways moves Supreme Court on Dual Freight policy issue

The cash-strapped Indian Railways has moved the Supreme Court in a case against its dual pricing mechanism that can open up the possibility of the transporter collecting thousands of crores additionally from iron ore exporters, who allegedly misused the facility to evade full freight charges

The cash-strapped Indian Railways has moved the Supreme Court in a case against its dual pricing mechanism that can open up the possibility of the transporter collecting thousands of crores additionally from iron ore exporters, who allegedly misused the facility to evade full freight charges.

The railways has suffered a loss of over Rs.29,000 crore in five years on freight earnings because of the faulty manner in which it charged for the carriage of iron ore, the Comptroller and Auditor General of India (CAG) said in its report tabled in Parliament last month. The amount, if recovered, can significantly boost the capex plans of the cash-strapped entity, which has projected a 52% jump in Plan spending for the current fiscal.

Ever since the evasion was detected in 2011, the case has been under the scanner of the Central Vigilance Commission (CVC), the CAG, CBI and other agencies. Seeking the transfer of around two dozen petitions pending before different high courts in the country against its 2008 dual pricing mechanism for iron ore, the government has challenged the Calcutta High Court’s order in December last year that upheld the railways’ policy, but restrained it from blacklisting the companies and imposing penalty on them for evading the full freight charges by falsely claiming that the iron ore they moved through railways was meant for domestic consumption.

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