Despite prolonged delays in delivery of freight wagons by private manufacturers, the Railway Board has placed an additional order for 9,468 wagons costing ₹2,635 crore.

The backlog is as high as 25,000 units, which will take at least another couple of years to be cleared.

Tender for reverse bidding

Some of the large wagon manufacturers include Texmaco Rail & Engineering, Titagarh Wagons, Jindal Rail Infrastructure, Modern Industries, Hindustan Engineering, BESCO and Jupiter Wagons.

The Railway Board’s tender is for reverse bidding for 3,900 open wagons, 2,840 open rapid discharge hopper wagons, 107 hopper wagons, 1,000 rail wagons, 600 POL tank wagons and 1,021 flat wagons. The additional wagons will add to the current fleet of nearly 3 lakh wagons of two varieties — open and closed.

Under reverse auction, suppliers compete against each other to reduce the price in a process in which the last bid price is revealed to every competing bidder. This is as opposed to a conventional tender wherein the bids are provided in sealed covers.

Delay in delivery

A member of the Railway Board confirmed that the Railways has been adversely affected by the delay in supply of freight wagons by private manufacturers. The new wagons are for replacing old rolling stock and also to create a buffer.

“With the private companies struggling to supply, we have increased our manufacturing capacity in the Railways, which will produce over 4,000 wagons this year. They (private players) have to speed up their production capacity to clear the huge backlog.”

If private players are unable to meet the demand, the only option left is to import, which is not new to the Railways. The Container Corporation of India, a unit of the Railways, imports most of its containers, especially from China, said Railway sources.

In 2018-19, the Railways loaded 1,216 million tonnes (mt) of goods, 55 mt more than that loaded in the previous year. Coal and coke contribute nearly 60 per cent of the freight traffic, followed by cement and foodgrains. There is no shortage of demand to move cargo. Construction of the Eastern and the Western Dedicated Freight Corridors will lead freight volumes to more than double to 2,165 mt by FY2020, the source said.

Bulk commodities

The Railways’ freight business is supported by five major bulk commodities — coal, steel, foodgrains, fertilisers and petroleum products — and movement of containers by the Container Corporation. Freight contributes to over 65 per cent of the Railways’ revenue. “Profit from the freight business is used to cross-subsidise the passenger segment,” said a Railway official.

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