But there will be almost no cost increase for transporting the finished products, namely HR coils, CR coils, GP/GC sheets. "It can, at worst be minimal," an official of an integrated steel producer said.

Till late in the evening, the steel companies were confused as to whether the sops for the sector will offset the four per cent hike in freight rates. This was because none of them could get the details of the sops that were announced.

The new private sector steel companies in western India, being port-based, will be the least affected as most use the sea route and roads to transport the raw material from eastern India.

"We always have the option to shift to road transport if it is found that freight costs are becoming significantly higher if the railway wagons are used," anindustry official said.