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Phalguna Jandhyala

Hyderabad, April 2 The Indian Railways has floated fresh tenders, inviting companies to bid for the construction of a cast wheel manufacturing plant in Bihar at an approximate cost of works around Rs 780 crore. The tender was opened on March 21.

This renewed attempt has caused delay in the supply of the essential component especially since the demand for freight wagons has increased considerably in recent times, according to industry sources.

Also, the Chicago-based Amsted Rail, JP Morgan One Equity Partners (OEP) and the Hyderabad-based Patil Rail Infrastructure Ltd (PRIL) had proposed to set up a joint venture company for manufacturing the same product at a much cheaper cost.

“Originally, the Indian Railways wanted to adopt a public private partnership (PPP) route for the plant and we had evinced interest. In a presentation to the officials concerned last year, we quoted an investment of Rs 500 crore for the proposed plant that would manufacture 1.5 lakh wheels annually at Chhapra, in Bihar. Later, they decided to set up the facility on their own and invited global tenders for supply of plant equipment for which Tata and L&T submitted the bids,” an official close to the development told Business Line.

He added that as per the estimates made by both the companies, the investment for the project was around Rs 900 crore as they had to hire technology.

But just when the bids were to be announced, the Railways cancelled the tender.

Currently, the wheels are supplied by the Rail Wheel Factory, which the Railways owns. It has a manufacturing capability of 1.3 lakh wheels a year. Incidentally, this plant was set up by Amsted.

Another 70,000 wheels are produced by SAIL’s Durgapur plant and the balance is imported from companies including Amsted as the Indian Railways requires around three lakh wheels annually and the requirement is growing at 20 per cent annually.

As per the original plan presented late last year, a greenfield facility to be owned by a separate company, in which Amsted will have a 30 per cent stake, JP Morgan OEP 25 per cent stake and the remaining 45 per cent stake owned by Patil Rail was to be formed.

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