Wagon units keep fingers crossed

Shortage of wheelsets may derail the minister's dream budget

Private sector railway wagon companies in the eastern region said implementation would make or break the railway budget presented by minister Lalu Prasad in Parliament today.

The critical shortage of railway wheel sets had not been tackled and this alone could derail the minister's dreams of strong growth in freight and passenger traffic, they indicated.

Ramesh Maheswari, president and CEO of the K K Birla owned Texmaco Ltd., warned, "The constraint which may hamper the Railways' wagon procurement programme is the critical global shortage of wheelsets. Rail Wheel Factory of Indian Railways at Bangalore, which is the only source at present, will not be able to meet the emerging demand of wheelsets for higher turnout of conventional, special purpose and container flat wagons".

He felt the minister should approve new suppliers at the earliest as unused capacities existed in the sector.

On all other counts, the railway minister deserves "distinction marks", he added.

Umesh Chowdhury of the Titagarh Industries group said the wheelsets problem should be tackled by immediate enhancement of capacity at the existing plant, as also by floating of tenders for development of new vendors through the public-private partnership (PPP) route.

"For example, investors may offer the Railways free equity in such a venture against an assured offtake of a determined percentage of production", he said.

Striking a more positive note, Pawan Ruia of Jessop & Co said, "Jessop will explore the opportunity opened through allowing private container trains to ply from March 31, 2006".

Jessop had been contacted by the Railways and had committed a supply of 300 wagons every month from its unit.

"With the new policy of free supply of materials, Jessop does not envisage any problems", Ruia added.

Wagon makers pointed out that in the last one year, the earlier schemes of the railway ministry like the wagon investment scheme had already led to orders worth Rs250 crore.

The proposed dedicated freight corridor along the existing golden quadrilateral (GQ) linking the four metros and increase in payload by raising axleload from 20.3 ton to 22.9 ton, combined with higher wagon procurement and introduction of special purpose wagons using more stainless steel and aluminium would boost the sector.

The wagon industry had been grossly under-utilised over the years and the last five years' average wagon orders placed by the Railways was only 6086 vehicle units (VUs) with off-take at 5553VUs only through the Railway fleet had about 21000 wagons waiting to be condemned.

Maheswari said a long term commercial plan to build a modern wagon fleet to ward off competitive threat from roadways and oil pipelines was urgently needed.

Chowdhury praised the Railways for starting to behave like a commercial organisation offering discounts and loyalty rewards.

Ruia said the emphasis on improving efficiency and lowering of both fare and freight along with the decision of increasing wagon manufacturing capacity by 25 per cent was expected to lead a larger order for coaches in the next fiscal.

"The hike in wagon procurement will boost the private sector in the industry," Titagarh Industries chairman J P Chowdhury said.

The wagon industry was worth about Rs 2,000 crore last fiscal.

The wagon sector was concentrated in the eastern region with almost 90 per cent of the wagons supplied by the private sector.