New Delhi: With the Railways deciding to levy a two per cent surcharge on freight as development charge effective from July 1 freight rates are expected to go up.

Additionally, the Railways has also decided to levy a terminal handling charge of Rs10 per tonne per terminal from 1 July.

The terminal charges will be levied for bulk and loose traffic on terminals and sidings owned by the Railways only - so the terminals owned by customers would not attract any surcharge.

Both load and unloading of goods at terminals would attract Rs10 surcharge each.

These charges will be levied on loading and unloading terminals independently and separately on the basis of chargeable weight at the time of issue of railway receipt said the Railways in an order.

If a customer books 3,600 tonnes of coal from a private siding to a goods shed, the firm would have to pay Rs36,000 as terminal charge. But if the same traffic is to be moved between two goods sheds owned by the Railways, the customer would have to pay Rs36,000 as terminal charge for each terminal - totalling Rs72,000.

However, if the traffic moves between two private sidings, no terminal charge will be levied.

With the Railways aiming to load 785 million tonnes of goods in 2007-08, it could earn over Rs1,400 crore through these charges, said Ministry officials.

While levying the two per cent surcharge, the Railways has spared the companies with whom it has already entered into long-term contracts - allowing them to use parcel and luggage vans on lease till the contract period ends.