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The BJP-led Government has not applied the brakes on the State-owned RINL’s ₹1,100 crore railway wheel making project at Congress Chairperson Sonia Gandhi’s constituency Rae Bareli in Uttar Pradesh.
Sources in RINL said the project implementation was on, albeit at a slower pace, after May this year when the new Government assumed power at the Centre.
The project is located near the ₹1,685 crore Railway Coach Factory, and has been leased portion of the railway land.
However, the ₹400-crore axle project at New Jalpaiguri in West Bengal has not progressed in absence of deals on off-take and price agreements except a land lease deal.
RINL insiders told BusinessLine that following the land lease agreement, construction of a demarcation wall at the Uttar Pradesh project site was on now. RINL has also started the process of tendering for EPC work various project components such as a forging shop, shaping and finishing mills.
Project report
According to the approved detailed project report, the project commissioning timeline would be 36 months from the placement of orders for the shop and mills.
“RINL is moving cautiously regarding the tenders for the politically loaded project so that question of re-tendering does not arise. There has not been any intervention so far. [The] Railways, however, are taking their own time to formalise the agreements for the axle plant in West Bengal”, explained a senior official.
The Railways has committed to buy 80 per cent of the 1 lakh wheels capacity project every year, whereas it has not yet figured out axle purchase quantum and pricing.
It has stopped short with an “assurance” of 20,000 axles of the proposed 50,000 units a year. According to industry insiders, both the plants, meant for high-speed trains and heavy-duty wagons, should have been at the same site for better economies of scale. Incidentally, the Durgapur plant of SAIL [Steel Authority of India] at present supplies both wheels and axles to the Railways.
Change in priority
The split projects, proposed during the previous Congress-led UPA regime, also had seen change in priority. Railways, driven by a Trinamool Minister, then an UPA ally, first set in motion the axle project in West Bengal and followed it up with the Uttar Pradesh project. After the Trinamool left UPA, the wheel project got precedence.
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