The Hindu Business Line : Rise in small sponge iron units — Zonal rlys find it tough to meet demand for wagons

THE mushrooming of small sponge iron units, the capacity ranging between 50 tonnes and 300 tonnes annually in each unit, in certain pockets of West Bengal, Orissa and Jharkhand has rendered the issue of wagon allotment a complex subject for the zonal railways serving these States, more so because most of these units have been set up without obtaining prior clearance from the respective zonal railways.

The zonal railways, therefore, now find it hard to meet their burgeoning demand for wagons, particularly for transportation of raw materials.

For example, more than 30 units have sprung up in past couple of years in West Bengal's Asansol-Durgapur belt alone, and with it have skyrocketed their demands for wagons for transportation of iron ore. But where are the wagons? Despite best efforts, the railways has made it clear, the demands cannot be fully met.

With the onset of the busy season, i.e. October onwards, the zonal railways such as South Eastern and East Coast have been flooded with indents for wagons. Since certain amount of overindenting, i.e. placing indents for more wagons than actually required, is unavoidable, the railways too in turn does not rule out the chances of skewed distribution at the time of allotment. It is possible that some genuine demands are often getting low priority.

But then it is not simply the availability of wagons that is crucial. Equally important are the facilities at the loading points, i.e. mines, and also at the unloading points. Most of the mines have slow-moving single line network; also the loading systems there are old and outmoded. It is difficult to place there too many wagons at a time and far more difficult to expect their expeditious loading.

The situation at the unloading point too leaves much to be desired. While some of the bigger sponge iron plants might be having private sidings, most others depend on the railway sidings for unloading. But such sidings, not too many numbers, also handle a variety of other items.

The situation perhaps can be tackled better if there is some sort of regulatory authority to monitor it, assess the actual demand and plan well in advance, says railways sources. At least there should be some sort of a nodal agency to coordinate and make fitting adjustments among conflicting interests of various agencies. Alternatively, wagon allotments for exports of iron ore have to be accorded lower priority vis-à-vis domestic demands.

As the railway sources point out, the problem is not so much with the integrated steel plants and big consumers whose wagon demands are made known well in advance. It is the smaller units, by and large in the organised sector, which cause the major headache, more so because the demand for wagons of these units is highly seasonal, rising only during this time of the year.

Capping it all, the sudden spurt in overseas demand for iron ore has given birth to many fly-by-night exporters. The activity of these exporters too should be curbed, or at least brought under certain rules and regulations. There has to be judicious mix of allotments in respect exports and domestic movement. Otherwise, the demand-supply gap in wagons will never close.