KOLKATA: State-owned SAIL has signed a 50:50 joint venture with Indian Railways arm RITES to build a wagon-making unit at Kulti near Asansol in West Bengal. The total investment for the project is estimated at Rs 205 crore. The proposed factory will come up on 12 acres, which belong to Iisco Steel Plant, now part of SAIL.
For SAIL, the venture will provide an assured offtake of value added steels by a large consumer like the Railways. Bengal Wagons — as the new joint venture is being tentatively referred to — is perhaps one of the fastest joint ventures to be formed between two PSUs and is indicative of the growing collaboration between Railways and SAIL. Following an MoU signed in May 2010, the feasibility study for the joint venture was completed in less than four months.
The new unit will be able to handle about 1,500 wagons a year, which would include manufacture of 1,200 wagons and rehabilitation of another 300 wagons. It will manufacture BOXN type wagons, used in transporting iron ore, including some of the most specialised high-end wagons. It would also be able to manufacture stainless steel wagons with marginal investment in plant and machinery.
Sanjiv Handa, member (mechanical), Railway Board said that the new wagon factory will be “a trend centre and herald a new benchmark for quality wagon manufacture.” The plant is envisaged to be erected and commissioned within 14 months from the incorporation of the joint venture company.
The Railways’ initiative is part of an effort to tide over an acute shortage of wagons that threatens to derail its ambitious freight loading target. It comes close on heels of Railways releasing a long-delayed order last week for procurement of 18,000 wagons in 2010-11. The Railways also have plans to set up wagon-making facilities at other locations like Secunderabad, Bhubaneshwar / Kalahandi, Haldia and Guwahati.
The project cost is estimated to be around Rs 85 crore in the first phase while it would require Rs 120 crore in the second stage. With this, Indian Railways has taken a step to set up a wagon-making facility on its own. So far, the Railways have relied on private sector producers to procure wagons. Earlier this year, the Cabinet approved Railways’ move to take over wagon-making units of Burn and Braithwaite & Co from the department of heavy industries. Subsequently, the Railways farmed out orders for some 1,000 wagons to the two entities.
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