The Hindu Business Line : Rlys insists on excise certificates from sponge iron, other units

Beleaguered by the spurt in demand for rakes for transportation of iron ore from the mines to the plants, the Directorate of Rail Movement has started insisting on the excise certificates from sponge iron and other units in support of their demand.

The move is believed to be aimed at curbing inflated demand for rakes, allegedly placed by many sponge iron and other steel producing plants.

The excise certificates would show the actual production on the basis of which the raw material requirement can be assessed and the actual demand for rakes calculated. The move, it is therefore felt, will help check the alleged malpractices.

Some sponge iron units have argued that the placing of the inflated demand for rakes is often keeping in mind the projected increase in production. This year's production will be more than last year's and therefore any allotment on the basis of last year's production can be misleading. But the Railways is not convinced of the rationale of the argument, more so because past experiences show that the requisitions for rakes would not often have any relation to actual production. Worse, there have been instances of allotments on the basis of requisitions, which are disproportionately large as compared to the actual requirement.

In a sense, the Railways has become the victim of its own decision to throw the Central Board of Transport (CBT) doors open to all and sundry. CBT is a sort of an exclusive club whose members are entitled to assured allotment of iron ore rakes. Earlier, only a handful of steel companies like Tata Steel, SAIL plants, subsequently RINL, were its members and much later Jindal Steel was also brought under it.

For the past few years, other private sector steel plants have been lobbying with the Government to become members of CBT. Succumbing to the pressure, the Government allowed another 14 firms to become the members of the exclusive club. As a result, the Railways has been forced to make arrangements for assured supply of rakes to a much larger number of customers.

It is now learnt that 26 more firms have applied to the Railways for memberships of CBT. If their demand is conceded, the exclusivity of the CBT will go.

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