IR to double Wagon purchases to 15000 Units this fiscal – a definitive sign of an uptick in freight movement

CHUGGING AHEAD FULL STEAM – The revised target is almost double the actual procurement of 8,000 in the last fiscal. Officials and industry players attribute it to an improved demand from the existing network

NEW DELHI: In what could be seen as a definitive sign of an uptick in freight movement, Indian Railways has significantly revised its wagon requirement to 15,000 during the current year, which is almost double the actual procurement of 8,000 in the last fiscal.

The revised requirement is also higher than 12,000 indicated earlier. Finance minister Arun Jaitley had said in his Budget speech that 12,000 wagons, 5,160 coaches and approximately 700 locomotives are to be procured during this financial year.

According to Indian Railways officials and industry players, the upward revision has been triggered by an improved demand from existing Railways network. This, without considering major upcoming projects like dedicated freight corridors.

“As per traffic data, the annual requirement of around 15,000-plus wagons is projected in 2018-19,” an official of Railway Board’s store directorate said in a recent meeting to decide on the Railways’s requirements for the current financial year.

According to the official, this revision in requirement has been triggered by improved loading of freight on wagons.

Improvement in demand for more wagons comes from increased economic activities, said industry players.

“The railway traffic is showing a healthy growth. This (revision in target) is primarily for the existing railway network and not for projects like dedicated freight corridor,” Umesh Chowdhary, vice-chairman and managing director, Titagarh Wagons told.

The steep surge in demand has come after a subdued procurement of just around 8,000 wagons in the previous year from various manufacturers across both public as well as private sector, while the target was set at 12,000 units.

With work on eastern and western dedicated freight corridors in full swing, the demand for wagons is set to swell in the coming days.

The initial requirement for specialised wagons for the dedicated freight corridor is expected to flow in the next two to three quarters along with orders for coaches from three to four metro railways projects across the country.

Railways’s last wagon order, for about 9500 units, was issued in January to the private sector players, with Chowdhury-headed Titagarh group cornering orders for 2,338 wagons, or about 25% of the total order given out.

Beginning this financial year, wagon procurement would be based on reverse tendering process which will cut down usual disputes among the bidders, which often delays the final award of orders.

Reserve auctioning involves online bidding where bid prices are known by all participants, and hence players, compete to put in the lowest price.

Earlier, on several occasions, it was later revealed that winning bidder had tried to under-cut healthy competition by bidding below the cost of production, following which the entire tendering process had to be cancelled.

Indian Railways is currently undertaking a massive investment initiative to boost capacity, with plans to invest about Rs 8.56 lakh crore over the next five years, of which over Rs 1 lakh crore would be put in to augment wagon, coach and locomotive capacities.