The Hindu Business Line : Customers' investments in rail wagons go up

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New Delhi Feb. 7 More and more customers of Indian Railways, both from public and private sector, are investing in the wagon investment scheme of the Railways, which allows those players to procure wagons and get benefits from railways while transporting their goods.

Under the wagon investment scheme, customers investing in railway wagons are assured of supply of guaranteed number of rakes every month based on the number of rakes procured. The investors also get a rebate in freight of 10 per cent for BOXN wagons for 10 years and BCN wagons up to 15 years.

In the current financial year, till January-end, 680 wagons were running on the railway system, which were procured by various private sector firms from sectors including steel and iron ore. Compared to this, in the previous fiscal (2005-06), private firms had invested in running 473 wagons on the railway system.

Targeting 2,000 wagons

The Railways has set a target of bringing in 2,000 wagons into its system through investments from private sector every year over the next three years. "We expect a total requirement of 12,000 wagons every year. While we would invest in 10,000 wagons every year, we expect to get about 2,000 wagons through investments from our customers in the public and private sector," a senior Ministry official told Business Line.

This financial year, till January end, the Railways had procured 6,725 wagons, with each wagon costing an average of Rs 16 lakh. However, the cost per wagon for other buyers is relatively higher since they do not have the bulk order advantage.