The Hindu Business Line : Private wagon makers welcome Railway Budget

Kolkata, Feb. 26 Private wagon makers are happy over the Railway Minister’s proposal for almost doubling the procurement size and also increasing the number of high-margin stainless steel wagons compared to mild steel wagons.

The Indian Railways has planned to procure 20,000 wagons in 2008-09 against little over 10,000 wagons in 2007-08.

According to Mr Ramesh Maheshwari, President & CEO of Texmaco, in 2007-08, the stainless steel wagons constituted marginal orders in relation to the total wagon orders. In 2008-09, it could be substantially higher, he felt. But since the accent is now more on technology upgradation, wagon builders would have to gear up to meet greater demands on their technological infrastructure, design and production capabilities to attain higher profitability.

Mr Maheshwari said the decision to set up bulk handling terminals would see a “spurt in manufacture of commodity-specific wagons”.

The announcement of a freight cut on movement of petroleum products and fly ash would bring about a substantial increase in the requirement of tank wagons and wagons for transport of cement and fly ash.

The Railways’ decision that from now on only stainless steel coaches would be procured, is also regarded favourable for Texmaco. It has a 30 per cent of share in domestic wagons market, also produces coaches.

According to Mr Umesh Choudhary, Managing Director of Titagarh Wagons, the price gap between the lower end wagons and higher end wagons is increasing. The price divergence could as high as 50 per cent or more.

Mr Pawan K. Ruia, Chairman of Jessop & Co, commended the proposal to allow wagon makers to import technology and the hike in the procurement target.

Reacting to the Railway Budget Stone India Ltd’s Managing Director & CEO, Mr A. Mondal, said: “The Railway Budget is positive and will augur well for the railways and our company. There are many things in the Railway Budget that are positive. We have put many of our patented products in the railway system. There are several advanced electronics products that we have developed for the Indian Railways.”

Stone India Ltd is the largest manufacturer and supplier of high-quality brake systems, train lighting alternators and pantographs to the Indian Railways. The company manufactures high-tech mechanical and electrical products for the railways’ rolling stock applications. The Stone India scrip closed the day higher at Rs 131.20, against its previous close of Rs 126.55.

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