Financial Daily from THE HINDU group of publications
Monday, Mar 01, 2004
Columns - On the move
Railway wagons: High demand, short supply
Delivery of wagons must be stepped up since the production is not a switch-on and switch-off operation.
In 2002-03, the Railways handled a total of 518 million tonnes (mt) of traffic; the figure this fiscal is estimated to exceed 550 mt. The outcry for wagons underscores that the Railways is not geared to handle the additional 32 mt or so. The problem will worsen in 2004-05 when there will be demand for transportation of an additional 20-25 mt of traffic.
The Railways virtually slept over wagon procurement over the years. The wagon order for a particular financial year is generally placed around May/June, sometimes even later. Then there will be delay in the approval of prototypes by the RDSO and further delay in the delivery of free supply items. For example, the orders for 20,000 wagons for 2003-04 were placed in May 2003. No wonder, till December 2003, only 40 per cent of the order placed was delivered. Again 80 per cent of the wagons delivered were by private builders, with public sector companies having supplied the balance 20 per cent. This has been continuing for years.
A few months ago, the Railways had urged the wagon-builders to step up the delivery, knowing fully well that wagon-building is not a switch-on and switch-off operation. The volume of production could not be stepped up at will.
According to a section in the Railways, a few other factors, such as the creation of new zones (16 now as against nine a couple of years ago) and the critical law and order problem in certain parts of the country, too have contributed to the present crisis. With each zone virtually functioning as an independent kingdom, the wagons get detained and the rake movement slows down. Similarly, the Gaya-Mughalsarai section, the country's highest density freight corridor, is also most vulnerable from the law and order point of view.
The shortage, the Railway sources point out, is particularly visible only in respect of a particular type of wagon, namely, Box N, and the worst sufferers are the non-core consumers. In Railways parlance, there are six categories of core consumers. Defence, of course, tops the list, followed by coal (for maintaining supplies to power plants), then steel sector (for movement of both raw materials and finished products), cement, fertilisers and food grains. All others fall in the non-core category. Among the core consumers, Box N wagons are required for movement of coal for both power and steel plants. The Defence has its own specialised requirement which in any case has to be met. The cement, fertilisers and food grains are generally moved in covered (BCN) wagons whose availability, Railways sources point out, is not as bad as that of Box N type, though the food grains exporters have a different story to tell.
The Box N wagons, accounting for a little over 40 per cent of the total wagon-holding and ideally suited for mechanical loading and unloading, are usually preferred by the coal companies. The steel plants need these wagons mainly for movement of raw materials, not so much for finished products. However, the shortage of BRNA (flat) wagons needed for movement of finished products often forces the steel plants to use Box N causing detention and delays.
The Railways are required to load as many as 30 rakes of thermal coal (in Box N wagons) every day 25 rakes from West Bengal/Bihar coal fields and five rakes from the Bilaspur region for power plants in the north India. After unloading, these wagons come back as empties. At the same time, the Railways send every day at least 10 rakes of empty covered wagons ( total capacity 25,000 tonnes) from the same West Bengal/Bihar region to different locations of north India to bring in food grains. Thus there is a complete mismatch Box N wagons carrying coal to north India cannot be used for bringing in foodgrains nor can the covered wagons, sent as empties to north India, be used for sending thermal coal from Ranigunge/Jharia coal fields to upcountry power houses.
The Railways is believed to have urged the coal companies to use some covered wagons for loading coal for north Indian destinations so that these could be used for bringing in foodgrains during their return journey. "If only two rakes of covered wagons could be used for coal loading every day, the present problem will have been largely reduced," say the sources. However, the coal companies are reluctant. Perhaps rightly so. The covered wagons cannot be handled mechanically but only manually and most collieries of BCCL and ECL, both sick companies, have got rid of the surplus workforce and resorted to mechanical loading. For obvious reasons, they would not like to go back to manual loading which is not cost-effective.
SAIL, the largest steel producer, needs on an average 25 rakes of Box N wagons every day. The current availability is about 20 rakes. "We are somehow managing, with inventories of raw materials having dropped to two-three days' requirement," say SAIL sources.
The Railways have a total of about 3,500 BRNA wagons, a large number of which, about 1,300 or so, are required for its own captive use. About 2200 BRNA wagons are available, mainly to steel plants for movement of finished products while the requirement will be more than 3,000. In 2003-04, the Railways placed order for a little over 1,700 BRNA wagons; only 35 were delivered till December. The non-core consumers, mostly individual consumers requiring one or two wagons, together need at least two rakes of Box N a day. They are getting nothing, virtually.
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