Rail budget glosses over wagon shortage

The railway wagon building industry has slammed the Railway Budget proposal of starting wagon production at the Jamalpur Workshop, saying it would not help resolve the problems of raw material shortage and idle capacity in the sector.

Movement of commodities and goods have suffered in the last year owing to shortage of wagons including wagons for supply of goods for exports through ports and land ports.

Industry sources said 30-50 per cent of the installed capacity was idle owing to lack of orders. Steps were needed to use existing facilities better through streamlined procurement practices.

The wagon building industry in its pre-budget meeting with the Railway minister Lalu Prasad Yadav on June 30 had highlighted these issues. However, no steps have been taken to tackle the problem.

Orders for wagons for this fiscal were placed only in May but matching free supply of raw materials from Railways was yet to arrive at factories.

In the previous fiscal, orders were placed in May and free supply came in September. The units could not take up production because of delayed supplies, Ramesh Maheshwari, president and CEO of Texmaco Ltd, one of the largest private wagon manufacturer, said.

P K Ruia, chairman, Jessop & Co also noted that there was 'nothing specific for the wagon industry as such," but said heavy engineering companies would benefit in the long run.

In 2003-4, the public sector delivered only 4,717 wagons against a total order on them for 13,882 wagons. The total wagon making capacity in the country was about 30,000 units a year.

"Lately it is being presented that private sector is not able to fulfil the orders placed to them. This is a distorted picture. Only one private sector unit - HEI - that had an order of 3920 wagons for 2003-4 but it could deliver only 500 units. As a result, the rest 1325 wagons were transferred to Texmaco, BESCO and Modern," Maheswari said.

However, the minister in his speech said only 13,471 were manufactured in 2003-04 against Railways' requirement of 19,050 four-wheeler units of wagons.