BEML/Palghat plant in huge losses due to Lack of Rail connectivity

Palakkad: Be it a politically motivated or a necessity in reality, leave alone the viability factors, the much pampered BEML Plant at Palakkad which was built by Ministry of Defence at the political behest of A.K.Antony today faces huge losses due to lack of rail connectivity for transporting rail coaches and drying orders for Tatra trucks resulting to the withholding of investments promised for the Palakkad unit of BEML Limited (a PSU under Ministry of Defence), putting a question mark on the future of the Palakkad plant of Miniratna PSU. BEML Limited is currently incurring huge costs to transport railway coach shells to the Bangalore unit where the interiors and wheels of the coaches are fitted.

These additional costs have made the Palakkad unit less competitive, said sources at BEML. Consequently, although Defence Minister A K Antony, who was instrumental in setting up the unit, had promised an investment of Rs.260 crore in the first phase, BEML which had spent Rs.160 crore, is not keen on further capital infusion. The second phase of expansion in Kanjikode has also been put on hold.

Initially Rs.77 crore was proposed for establishing rail connectivity, the implementing agency for which was KINFRA. The State government had made a provision of Rs.44.83 crore in the budget for the same. The greenfield project, set up on 16 May 2010, was promised rail connectivity from the manufacturing unit to Kanjikode railway station by the then government. Around 25 acres was proposed to be acquired so that the finished coaches manufactured at the plant could be transported. Till date, the Palakkad unit has supplied around 180 rail coach shells and bogie frames. It had also supplied around 600 Tatra trucks before the scam came to the surface.

As a reply to the question Mr.P Dwarkanath, CMD of BEML Limited in Bangalore, he said: “Talks are being held at senior levels to discuss the rail connectivity issue. A detailed project report is being prepared by RITES, which will be finalised soon”. However he is surprised how the Ministry of Defence and the BEML Limited had taken a decision to setting up of the plant there without consulting Ministry of Railways.

A meeting, chaired by additional chief secretary V Somasundaram, was held in Thiruvananthapuram recently in which Dwarakanath, Piyush Agarwal, the Palakkad Divisional Railway Manager, and officials of RITES and KINFRA participated to discuss aspects related to funding for connectivity over and above what is provisioned by the government.

S Ramnath, MD/KINFRA told that the meeting was held as the funds required for the 6-km-long rail connectivity project was running over projected figures. At the meeting, it was agreed that costs would be brought down by modifying the design. The Railways was of the view that in return for the land, the cost could be offset from the freight charges incurred for transporting the coaches over the years.

Ramnath has said that he will meet Dwarkanath to finalise the project soon.