Indian Railways on Tuesday signed an initial pact with rolling stock manufacturer SAIL-RITES Bengal Wagon Industry Ltd (SRBWI) for procurement of high-class stainless steel freight wagons at a cost of Rs 2,500 crore over 10 years.

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.

The Memorandum of Understanding (MoU) signing ceremony was attended by rail minister Suresh Prabhu, Steel and mines minister Narendra Singh Tomar, SAIL Chairman A K Pujari and RITES Chairman Rajeev Mehrotra.

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