The Telegraph
Since 1st March, 1999
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Wagon makers sulk

Calcutta, Feb. 26: The wagon industry purports to be less cheerful about the railway budget. Railway minister Nitish Kumar has proposed a marginal increase of around Rs 17 crore in investment towards the procurement of rolling stock during the next financial year.

While the revised investment for the current year has been estimated at Rs 1,008 crore, the proposed investment has been pegged at Rs 1025.05 crore for 2003-04 for rolling stock procurement.

Ramesh Maheshwari, president of Texmaco said: “ Railways need both to expand and modernise its wagon fleet to achieve a quantum jump in goods traffic earnings. Unfortunately, the development expenditure of railways is a dismal 2 per cent of its earnings.”

He noted that the railways is already carrying a huge backlog of over-age wagons, which stood at nearly 23,000 four-wheeler-units (FWU). The number is expected to go up to nearly 40,000 in the next three years time.

The railway budget has proposed to increase wagon intake from the current year’s 14,575 FWUs to 20,000 FWUs. “The railways’ procurement programme should take care of both replacement requirement and new requirement for an expanding economy,” he said.

Echoing Maheshwari, Titagurh Industries’ chairman J. P. Chowdhary said the budget would have received warm welcome had the order size been at least 30,000 FWUs.

“The wagon industry here, in which over 25,000 people are directly involved, is in a very bad shape for the lack of orders over the past few years. The industry is not even able to perform at 50 per cent capacity although railways has a major need for FWUs,” Chowdhary said.

Chowdhary has pointed out that the order size will only lead to a very unhealthy competition among the manufacturers and in the process a price cutting exercise cannot be ruled out.

“Though the railway budget has announced a marginal increase in offtake, the difficulties faced by the wagon industry are far from being wiped out,” he said.

Both Maheshwari and Chowdhary have, however, welcomed the budget target of 540 million tonne of revenue originating traffic, an increase of 25 million tonne from the revised estimate for the current year. “Even this target can be substantially exceeded, if railways go for an aggressive commercially oriented marketing strategy, backed by prompt and efficient customer service,” Maheshwari said.

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