The government today said the wagon manufacturing plant, jointly set up by SAIL and Indian Railways subsidiary RITES in West Bengal will see annual production of 1,200 units.
"SAIL and RITES have entered into a JV agreement for a wagon manufacturing facility in Kulti, Burdhman district of West Bengal. As per the JVA, wagon manufacturing plant will have a production capacity of 1,200 wagons per annum," Minister of State for Steel A Sai Prathap said the Lok Sabha.
The facility will also have rehabilitation capacity of 300 wagons per annum, Lok Sabha was informed.
Steel Authority of India Ltd had signed the JV agreement with Rail India Technical and Economic Services (RITES) on September 14 this year for the facility, which is likely to entail an expenditure of Rs 120 crore.
Both companies have a 50 per cent stake each in the JV, which is likely to start operation by December 2011 on SAIL's surplus land in Kulti which is near the Chittaranjan Locomotive Works.
Earlier, Steel Minister Virbhadra Singh had said that there are plans to form five more such JVs for wagon manufacturing.
As per estimates, every year there is shortfall of 6,000 wagons and the JV will held bridge the gap.
SAIL, which has an annual production capacity of about 14 million tonnes, will also supply its specialised steel products to the proposed wagon-making unit.
Railway Minister Mamata Banerjee had said earlier that the tentative name of the factory would be the Bengal Wagon Industry.
The present wagon demand in the country is around 25,000 units and it is expected to rise further once dedicated freight corridors start coming up.