State-owned steel major SAIL is planning to set up a coach manufacturing unit in a joint venture with the Railways in West Bengal's Kanchrapara.
"SAIL is in talks with Railways for setting up a coach factory in West Bengal. It will be like the joint venture [the company has with RITES] for wagon manufacturing unit in Kulti," Steel Minister Beni Prasad Verma told PTI.
He added that the coach factory is proposed to be set up in Kanchrapara district of the state and the steel major has held several rounds of discussion with Railway Board officials since September.
The Steel Minister, however, did not comment on the proposed investment and the capacity of the rail coach factory.
"A joint team has been formed by the Railways and SAIL to explore the possibilities, including manufacturing metro coaches and entering railway track laying," the minister said.
According to a senior SAIL official, the company is in talks with a few leading European rail technology companies manufacturing of coaches for metro trains.
The official added that SAIL Chairman CS Verma had also met the West Bengal Chief Minister and former Railway Minister Mamata Banerjee last month for the coach factory.
He, however, refused to comment on the proposed investment and capacity of the coach factory. "It is still in early stages and a proper strategy is to be evolved first," he said.
The proposed unit is a part of SAIL's Rs 20,000 crore expansion and modernisation drive in West Bengal, of which about Rs 14,440 crore is being spent on building a 2.3 million tonne steel unit at Burnpur, the official said.
"We are aiming to increase the share of value-added products in our total output from the present level of 37-38% to over 50% in the next 2-3 years," he said, adding that entering into the coach manufacturing area is one such attempt.
In September last year, the steel major had signed an agreement with RITES, a Railway PSU, for jointly setting up a railway wagon-making unit in Kulti, West Bengal at a cost of Rs 200 crore.
The unit will have an annual production capacity of 1,200 wagons and is expected to commence production in FY14.