The Hindu Business Line : `Railways should firm up wagon orders to cut down on backlog'

WAGON manufacturers want the Railways to firm up wagon orders for any fiscal at least 90 days before the beginning of that fiscal. This is required to cut down on the huge backlog.

The order for 2005-06, according to sources close to wagon manufacturers, should have been finalised by the Railways and placed with the manufacturers by December 2004, latest by January 2005.

However, that never happens. As a result, there will always be spillover from one year to the next, i.e., some of the orders placed for a particular financial year get carried over to the next financial year.

For example, the orders for 5,417 wagons (2,014 placed with private and 3,403 with public sector units), which could not be executed in 2003-04, spilled over to 2004-05. Similarly, the orders for 1,977 wagons (540 private sector and 1,437 public sector units) could not be executed in 2002-03 and, therefore, were carried over to 2003-04.

This is unfortunate but not surprising. Normally, the orders for wagons for a particular financial year are placed around the middle of the year, sometimes even later. As if this is not enough, the Railways takes its own time to supply steel and wheels, the free supply items to the wagon-builders.

There is another reason. The performance of the PSU units too leaves much to be desired. For example, for 2004-05, the public sector wagon manufacturers together had in hand total orders for 6,036 wagons (including spillover of 3,403 from the previous year). However, till November they could deliver only 997. There are seven public sector wagon-manufacturing units. During the same period, the private sector firms (there are five such firms) supplied 3,248 wagons out of the total order of 7,636 (including spillover of 2,014) they had in hand.

In 2004-05, fresh orders were placed for 8,255 wagons - 5,622 with private builders and 2,633 with public sector companies. Since there was a spillover of 5,417 from 2003-04, the wagon builders had orders in hand for a total of 13,672 for execution by March 31, 2005. Till November 2004, only 4,245 wagons were delivered. Which means the balance 9,427 wagons - 4,388 by private firms and 5,039 by public sector firms - are still to be delivered during the remainder of the current fiscal. As the situation stands now, it is a tall order on the wagon manufacturers as neither the private sector firms nor those in the public sector will be able to execute the entire order by March 31.

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