 "RINL to set up R&D unit to design rail wheels")
The wheels will be produced at RINL's Rs 1,000-crore manufacturing unit coming up at Rae Bareli in Uttar Pradesh. The plant is expected to be commissioned in three years.
Choudary told Business Standard that the existing rail coach factory at Rae Bareli had allocated 38 acres out of the 541 acres of land it has at the place to the wheel making unit for which tenders were being finalised. RINL had signed a memorandum of understanding with the Indian Railways in this regard in December 2012.
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He said the focus of the project would be on producing wheels suitable for high-speed trains so that they would have export potential besides catering to the future needs of railways.
Currently, railways is stated to be importing 70 per cent of the 70,000 wheels it requires in a year. The cost of imports is estimated at around Rs 350 crore. "The forged wheel manufacturing unit will help in reducing dependence on imports," Choudary emphasised.
The Rae Bareli unit will have an installed capacity for production of 100,000 wheels a year in Phase I. The capacity will be doubled in Phase II. On the other hand, demand for rail wheels in the country is expected to touch 100,000 units by 2016-17.
Choudary said the input for the proposed wheel unit would come from Visakhapatnam Steel Plant where a state-of-the-art caster was being set up. The caster, designed to produce 500 dia rounds, would be the biggest in the country.
The project is proposed to be funded through internal accruals and debt. "RINL can borrow more than Rs 12,000 crore. Our debt-equity ratio is hardly anything," Choudary said.
The wheel making unit is the second collaborative project of RINL with the railways. The first one is the Rail Axle Plant at New Jalpaiguri.