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| Circular number | Rates Circular No. 14 of 2017 |
|---|---|
| File number | No.TCR/1078/2016/14 |
| Date | 2017-03-30 |
| Type | Commercial Circular |
| Topic | freight |
Long Term Tariff Contract (LTTC) with Key Customers using pre- determined price escalation principle In case of any increase in freight rate during a year, the freight increase shall be
RATES CIRCULAR NO. 14 OF 2017 भारत सरकार (GOVERNMENT OF INDIA) Yor मंत्रालय (MINISTRY OF RAILWAYS) रेलवे बोर्ड (RAILWAY BOARD) No.TCR/1078/2016/14 New Delhi, dated 9@ .03.2017 The General Managers All Indian Railways. Sub: Long Term Tariff Contract (LTTC) with Key Customers using pre- determined price escalation principle. This policy is issued in compliance of the announcement made by Hon’ble MR in the Railway Budget Speech 2016. Details of the policy are as under: . 1.0 Introduction This policy of Long Term Tariff Contract (LTTC) is first of its kind and shall provide certainty in the logistic operations for the railways as well as the customers. The customers entering into long term contracts with railways shall bring assured traffic to the railways and in turn they get assurance of certainty in tariff rates as well as freight rebate on fulfilment of certain conditions as detailed in the policy. 2.0 Objectives The main objectives of this policy are to ensure: 2.1 Long term freight revenue commitments from the customers. 2.2 Stability and certainty of freight rates to the customers and assured supply of wagons. 2.3 Generation of additional traffic volumes and revenues for railways. 3.0 Definitions In this policy, the following words/ expressions shall, unless repugnant to the context or meaning thereof have the meaning hereinafter respectively assigned to them: 1. “Gross Freight Revenue” (GFR) means total freight revenue offered by the customer for the transportation of commodities. GFR of a customer will be derived by adding GFR of the different commodities. Hence, GFR= gfrl+ gfr2+ gfr3+... where 1,2,3 ... represent different commodities. GFR is inclusive of surcharges and other applicable charges, if any, but excluding all types of taxes 2. “Minimum Guaranteed Gross Freight Revenue’ (MGGFR) means the annual minimum gross freight revenue committed by the customer for each individual Financial Year of the Agreement. The MGGFR would normally be higher for each subsequent year with pre-agreed annual incremental growth for the entire period of the Agreement. 3. “Actual Gross Freight Revenue” (AGFR) means the total revenue realized by Railway from a customer for transportation of commodities by way of freight charges including surcharges and other charges, if any but excluding all types of taxes. 4. “Benchmark Gross Freight Revenue” BGFR means the revenue over which the incremental growth of GFR would be calculated. For the first year, BGFR shall be the actual GFR achieved during the previous twelve months and from second year onwards, it shall be equal to the MGGFR of preceding year. 10. 11. 12. 13. 4.0 5.0 5.1 5.2 5.3 RATES CIRCULAR NO. 14 OF 2017 “Floor rate” means the minimum chargeable rate payable after granting rebate/ all concurrent concessions, under any freight incentive scheme/ schemes including this Agreement. “Incentive” means benefit in freight charges or any other additional facility being granted to the Customer under the Agreement. “Freight rebate” means freight concession granted by way of refund paid in lump-sum based on fulfilment of certain agreed performance parameters over a period of time. “New Traffic” refers to the traffic loaded by a new customer coming to railway for the first time in the current year. “Rail co-efficient” means the percentage share of railways in the total dispatches by the Customer. “Normal Tariff Rate” (NTR) refer to the total charges for transport of a commodity inclusive of the Base Freight Rate as published in Goods Tariff plus Demand Management Charges like Busy Season Surcharge, Congestion Charge (if any) and Supplementary Charge as applicable on various transportation products. Other charges like Development Charge, Terminal charge, punitive charges for over loading, and penal charges for mis-declaration will be levied on NTR. “Budgetary Freight increase/ change” shall mean the freight increase/ change in Base Freight Rates, any other applicable
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