The Hindu Business Line : Rlys targets Rs 2,000 cr from scrap sale

In 2006-07, Railways had earned Rs 1,834 crore through scrap sale, comfortably surpassing its target of Rs 1,700 crore. The increase in realisation of scrap sale is driven by a mix of increase in quantity of scrap being sold as well as metal prices being firmed up.

Scrap items include worn-out rails, unserviceable items, condemned machinery and plant, rolling stock (wagons, coaches and locomotives).

This year, as a part of its over-aged assets, the Railways plans to scrap 17,400 four- wheeler wagons. This includes almost 3,400 wagons with vacuum brakes, which would be sold off. “Since Railways has started using wagons with air-brakes, which are more efficient and have a higher payload, based on economic considerations, the Ministry has decided to scrap wagons with vacuum-brakes,” explained sources.

Usually, the Railways sells thousands of tonnes of scrap, over 12,000-16,000 wagons, 1,200-1,300 coaches, 50-100 locomotives every year through tenders or public auction.

While Railways has improved its processes in the last few years, but there is still scope for improvement. “Railways can realise better returns if it could value-add the scrap by investing in some equipment. For instance, shredding and segregating scrap to suit the requirement of end-users could improve the earnings that Railways gets,” official sources told Business Line.

During the last few years to check leakages, the Railways standardised collection methods, started verifying quantities by Railways and vigilance officials after rails are collected, and faster lifting of rails. For example, it has been mandated that lots of rails should be formed at a gap of one kilometre at least, so that while lifting a particular lot near a rail track, people do not lift rails from another lot nearby.

The Railway Ministry is also considering a move to adopt Internet-based-auction of scrap. After a pilot project wherein Southern Railways sold scrap in e-auction last year, the zone has again been asked to carry out a pilot project this year to gather more experience.

In the process, at present, an external agency is asked to carry out the auction process for a certain fee. However, after successful experience gathering, the Railways is likely to integrate the process on its portal.