New Delhi: Tata Steel became the first steel company to enter into a Long Term Tariff contract (LTTC) with Indian Railways here on Friday.
Suresh Prabhakar Prabhu, Minister for Railways, senior officials of the Railway Board, and Sudhansu Pathak, Vice President, Steel Manufacturing, Tata Steel, among others, were present at the LTTC signing ceremony that was held at the Rail Bhawan here.
LTTC has been introduced by Indian Railways to establish long-term contracts with customers with guaranteed incremental revenue for Indian Railways.
The contract can be for a duration of 3-5 years. The main objectives of LTTC are:-
- Long-term revenue commitment from customers
- Preferential treatment to customer for supply of wagons
- Generation of additional traffic volumes and revenues for Railways
- Freight escalation protection i.e freight increase mid-year will not be passed on to the customer
- Freight concession on retention of traffic as well as on incremental traffic
Tata Steel has invested heavily in improving its rail infrastructure and material handling system. This has helped in reducing detention of railway rakes and bringing down the wagon turnaround time. Today, the relationship between Indian Railways and Tata Steel is not merely that of transporter and customer but of collaborators. The LTTC agreement will further strengthen this relationship in the days ahead.