Tata Steel on Friday said it has entered into long-term tariff contract with railways, becoming the first company in the steel sector to sign such pact.

“Tata Steel became the first steel company to enter into a long-term tariff contract (LTTC) with Indian railways here today,” the company said in a statement.

LTTC has been introduced by Indian Railways to establish long-term contracts with customers with guaranteed incremental revenue for Indian Railways, the statement said, adding that the contract can be for a duration of three to five years.

The main objectives of LTTC includes long-term revenue commitment from customers, preferential treatment to customer for supply of wagons, generation of additional traffic volumes and revenues for railways and freight concession on retention of traffic as well as on incremental traffic.

The long-term contract also aims at freight escalation protection i.E. Freight increase mid-year will not be passed on to the customer.