IR inks Pact with SAIL-RITES Ltd J.V. for Stainless Steel Freight Wagons

Railways enters into assured off-take agreement with SAIL-RITES Bengal Wagon Industry (SRBWIPL) for manufacture of wagons at Kulti, West Bengal.

New Delhi: In line with Prime Minister Narendra Modi’s ‘Make in India’ initiative, Railway Ministry today signed assured take off (AOT) agreement with Sail-Rites Bengal Wagon Industries Pvt Ltd, a joint venture of PSUs, for manufacturing and rehabilitating wagons in the state.

The signing of agreement marked beginning of production of wagons under the project envisaged in 2010-11. The Memorandum of Understanding (MoU) signing ceremony was attended by Railway Minister Suresh Prabhu, Steel and mines minister Narendra Singh Tomar, SAIL Chairman A K Pujari and RITES Chairman Rajeev Mehrotra.

The AOT is aimed at manufacturing and rehabilitation of 1200 and 300 wagons respectively per annum for a period of 10 years. Cost of the AOT will be Rs 2500 crore and expected to generate employment for about 400 people.

Speaking during the event, Railway Minister Suresh Prabhu termed the deal as “significant”. He hoped the factory set up by the venture will manufacture “most modern” wagons which are required for expansion of Railways and will emerge as a centre of excellence for development of special purpose wagons for domestic and international markets.

Expressing his satisfaction over the deal, Prabhu said the same created win-win situation for both the parties involved in the agreement. He noted growth in steel sector had taken a beating over the past decade and increase in demand for the metal from various sector was required to ensure it picks up.

“We as Railways carry cargo provided by our customers.

So, we are very happy steel sector is on the verge of growth (now) because that, in turn, will bring more cargo to us. So, not just manufactured steel, the end product which is transported, but to make steel you also need iron ore

“That again is transported by Railways. And therefore, creating demand for steel is in the interest of railways, it is beneficial for railways,” Prabhu, who was flanked by Union Minister of Steel and Mines Narendra Singh Tomar, said.

He lauded Tomar for Steel Ministry taking efforts to bring legislation on allotment and ways of using natural resources, saying the same will “change” face of “India of tomorrow”.

Prabhu also stressed on looking at options of using aluminum in production of wagons. This, he said, will make wagons lighter and at the same time increase their capacity.

On his part, Tomar observed Railways and SAIL as “important” pillars of country’s economy and added tie-up between the two will be very “fruitful” for the nation.

Tomar said the Government was not discouraged notwithstanding “hostile” conditions the steel industry and expressed resolved to work with full vigour to overcome the present situation.

The joint venture between steel manufacturer SAIL and rail ministry’s arm RITES was set up in 2011. The company operates a wagon factory at Kulti in West Bengal, from where the wagons will be supplied. “The pact includes a commitment for procuring 1,200 new and 300 refurbished wagons every year over a period of 10 years,” Railway Board’s Member-Mechanical Hemant Kumar said.

He added the factory at Kulti had been set up at a cost of Rs 120 crore and would be developed as a centre of excellence.

The assured offtake pact with the railways also envisages procurement and installation of equipment at the factory by RITES.

Steel secretary Aruna Sundarajan, who was also present on the occasion, said the steel ministry was working on an ambitious plan to ramp up domestic steel-making capacity from 100 million tonnes (mt) to 300 mt over the next few years. The increased steel supply would cater to the railways’ massive modernisation and expansion plan, she said.

Railway Board Chairman A K Mital said the assured supply of wagons over 10 years would help Indian Railways improve freight loading from 1.1 billion tonnes (bt) currently to 1.5 bt over the next five years. “This JV will give new wagons of increased capacity and better technology. Also, this factory will come up in an area (East) that contributes to a bulk of the loading,” he said.

LOWDOWN

  • Indian Railways on Tuesday signed an initial pact with SAIL-RITES Bengal Wagon Industry for procurement of high-class stainless steel freight wagons at a cost of Rs 2,500 crore over 10 years
  • The joint venture of steel manufacturer SAIL and rail ministry’s arm RITES was set up in 2011
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