The Hindu Business Line : RINL studying integrated transport network

Kolkata, Aug. 7 Rashtriya Ispat Nigam Ltd (RINL) is examining if an integrated transport network comprising rail, road and barge movement along the coast, could be worked out as a means to cost-effective evacuation of finished products out of the Visakhpatnam-based steel plant.

RINL will shortly invite bids from the barge operators along the coast for transportation of an estimated 2-2.5 lakh tonnes of finished goods annually to the west coast, particularly Kandla port, for catering to the markets in Gujarat, Rajasthan, parts of Maharashtra and Madhya Pradesh.

The scope of barge movement of about two lakh tonnes of products annually to Chennai and another 80,000 tonnes to Kochi too is being explored.

A few months ago, RINL, on an experimental basis, despatched by the coastal route about 1,000 of long products from Visakhapatnam to Kolkata. “The experiment did not prove to be highly cost effective,” observe RINL sources, adding, “first the shipment was in containers and then there were various other issues”.

Right now 65 per cent of RINL’s saleable steel production of 3.3 million tonnes is despatched by rail and the balance by road. The saleable steel production by 2009 is expected to rise to 5.7 mt. However, RINL authorities are not sure if the railways, already suffering from capacity constraints, would still be able to hold on to its present share of 65 per cent on the increased production.

What causes concern particularly is that more than 95 per cent of the raw materials used by RINL (or for that any steel plant) is transported into the plant by rail.

With the rise in production, the raw material requirement too will rise substantially. The road transportation is becoming costly particularly in the wake of the Supreme Court order banning overloading.

Ideal mix

Yet, RINL is still to work out the ideal mix of different modes of transportation system. Much would depend on how the scenario would evolve in the coming years. For certain shorter routes, the road mode, despite the cost, might still be preferable. In both rail and coastal movements, the economies could be obtained only over long leads. “All this and various other issues are being examined to arrive at the ideal mix,” the sources observe.

Despite rise in coal prices and the shipping freight, the coal import from Australia, an estimated three million tonnes annually, has not been much of a problem so far for RINL. “This is largely because we’ve long-term contracts for sourcing the raw materials,” the sources observe. Also, as it is pointed out, the contract of affreightment with Transchart for handling 60 per cent of the import has proved to be of great help. However, for the balance 40 per cent import, the spot freight rates have been very high.

It is hoped that the freight advantage in import will be more from around the middle of next year when the Gangavaram port will be ready for operation and RINL, to be provided with a captive berth in the port, will bring import in large capesize vessels as compared to present handymax and panamax vessels at Visakhapatnam port.

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