In a first, Railways to float global tender to buy rails as SAIL can’t keep up with demand

Saurabh Kumar, September 28,  2017

For the first time, Indian Railways will float global tenders to buy rails, as Steel Authority of India (SAIL), its sole supplier, can’t meet the transporter’s increased demand. Railway minister Piyush Goyal, who took charge recently in the wake of a spate of rail accidents, has identified track renewal as a focus area to prevent such incidents from taking place. In a reply in the Rajya Sabha during the monsoon session of Parliament, minister of state of railways Rajen Gohain had said, “Rail requirement that is not met by SAIL is amenable to procurement from (alternative) sources. For the year 2017-18, SAIL has committed to supply 11.45 lakh tonne rails. The balance requirement of about 3.14 lakh tonne is under consideration for procurement (from sources other than SAIL).”
The railways had earlier also considered issuing a global tender but the plan was put on the back burner given the government policy which stipulated use of Indian steel in infrastructure projects. “The minister (Goyal) has made it clear that rail is essential for maintenance, renewal and also for new projects. So the requirement has multiplied. Rail procurement will be given priority. We will look at all options — both indigenous and overseas,” said one railway official.
Though the lifespan of railway tracks is 25-30 years, some tracks are identified for underage replacement as well as these are prone to corrosion due to weather factors such as proximity to sea or heavy traffic. Till a couple of years back, SAIL supplied 6-7 lakh tonnes of rail, which matched the requirement of the railways. However, the transporter’s requirement has since risen fast. “Last year, there was a shortfall in renewal because of unavailability of rail as SAIL did not have enough capacity,” said another official, adding there was a shortfall of 200 km (rails) for new tracks.

SAIL is in the process of setting up a new plant for rail manufacturing but it will take time to materialise. In the meanwhile “if there will be a gap for a year or two, we will look for other sources”, said the first official quoted above.

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