It will mean assured offtake for SAIL, Rashtriya Ispat Nigam.
Public-public partnership is the new business model for the Indian Railways. While Steel Authority of India Ltd (SAIL) is looking to participate in the railways’ wagon, diesel electric multiple unit (DEMU) and railway track projects, Rashtriya Ispat Nigam Ltd (RINL) is at an advanced stage of discussions for a wheel and axle factory.
“Steel accounts for 40 per cent in a wagon,” SAIL Chairman C S Verma told Railway Minister Mamata Banerjee while making a pitch for the Kanchrapara and Dankuni projects, on the sidelines of an event that marked the commencement of work for Bengal Wagon Industry at Kulti.
Bengal Wagon Industry, the 50-50 joint venture between Rites and SAIL, would be equipped to handle 1,500 wagons a year. SAIL will provide 12 acres inside SAIL Growth Works, Kulti, on long-term lease. The project cost is envisaged to be around Rs 85 crore in the first phase, going up to Rs 120 crore in the second.
SAIL may not be able to enter the race for Kanchrapara or Dankuni, both of which have shortlisted global companies, or the wheel and axle factory at Jalpaiguri, which has roped in RINL; but Sankrail and Andal may go SAIL’s way. Andal will have a wagon factory for the dedicated freight corridor and Sankrail will house DEMU.
“Partnership with public sector companies is mutually beneficial. It will avoid sensitive issues like land. The private sector has been showing selective interest in projects and it’s also laborious and time consuming,” a railway board member said.
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The first phase of the Kulti project is expected to be commissioned within 14 months.
For PSUs like SAIL and RINL, it would mean an assured offtake. “An assured offtake is better than gold,” the railway board member added.
“I am looking forward to the day when the steel industry in India will be in a position to meet all the requirements of the railways,” Steel Minister Virbhadra Singh said while addressing the gathering.
“Steel, coal and railways will together determine the development of this region,” Railway Minister Mamata Banerjee said.
Acvcording to the Indian Railways’ Vision 2020 document, the projected requirement of wagons is around 29,000 vehicle units per year. The existing facilities in private and public sector railways-owned units stands at around 15,000.
SAIL was open to more collaborations, like the Bengal Wagon Industry, to meet all the future needs of the nation, Verma told the gathering.
SAIL has lined up an expansion programme which will take its capacity to 24 million tonnes by 2012-2013 and 60 million tonnes by 2020.