The Hindu Business Line : Sponge iron cos complain despite improvement in SE Rly loading

Despite significant improvement in daily average loading of iron ore by the South Eastern Railway (SER), the sponge iron and pig iron producers in Chhattisgarh, Orissa and Jharkhand complain that their demand for rakes is not being adequately met.

Right now SER loads on an average of about 55 rakes of ore per day to meet all sections of customers covering integrated steel plants, exporters, sponge iron and pig iron producers and others.

This is more than the average daily loading in the last year and much more than a few years ago; yet the sponge iron and pig iron producers are not satisfied. There are 57 such producers and, to fulfil their demand, SER will be required to load 20 rakes a day on an average. However, at present, SER loads about 10 to 11 rakes a day on an average for them. Each rake loads about 3,500 tonnes.

Capacity constraint

The problem facing the Railways is well-known: The capacity constraint, i.e., its capacity is not increasing in keeping with the demand due to a variety of reasons. Then there are other problems also. For example, Dongaposhi and Barsua are the preferred ore loading destinations of the sponge iron and pig iron producers. But these are also the places where every other iron ore consumer would like to load.

WIS customers

SER’s problem is that it cannot satisfy every body, more so because it has to accord to priority to WIS (wagon investment scheme) customers who have acquired rakes on their own and placed them with the Railways. The WIS customers are entitled to priority loading. There are 22 such rakes with SER.

Shortage of rakes

There are several private sidings run by either exporters or some steel producers or others but many of the sponge iron and pig iron producers are reluctant to go to those sidings for loading.

The apprehension is that they may not get the best of terms if they load in these sidings.

The Railways, the inquiries reveal, feel that the shortage of rakes is not really as much as it is made out to be. This is because the requisitions placed for rakes are often inflated.

More important, they really do not consume as much iron ore as estimated.

The railways give allocations of rakes on the basis of the estimate that to produce one tonne of finished product by these producers, 1.7 tonnes of ore will be needed.

In actual practice, the use of ore is limited to 70- 75 per cent of 1.7 tonnes and the balance is supplemented by scraps.

To that extent, the availability of ore is more than required.

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