NTPC has paid in advance Rs 4,700 crore to Railways for coal that the transporter will carry for the power major in financial year 2018-19. The money, however, will be reflected in earnings for the previous fiscal year.
While Indian Railways carried a record 1,162 million tonnes of freight in 2017-18, its highest ever, and around 4.8 per cent more than last year’s figures, the extra money from NTPC, an MoU for which was drawn on the last day of the financial year, will help the railway books look better and negate the possibility of a revenue shortfall in 2017-18. The extra money will have a direct bearing on the Operating Ratio of the transporter, which will now stay shy of 100 per cent, sources said.
In return, the NTPC will be insulated from all possible hikes in freight rates in 2018-19 and railways will remain a competitive mode for the power major. “This is a paradigm change. After the NTPC agreement, other players are also interested to enter into similar arrangements with us,” Railway Board Member (Traffic) Mohammad Jamshed said. Railways is looking to forge similar deals with other regular major clients.