The joint venture between Steel Authority of India Ltd (SAIL) and Burn Standard for a wagon components unit is to take shape shortly.
The proposed 50:50 venture between the West Bengal-based wagon manufacturing firm, now under the Ministry of Railways, and SAIL is for setting up a Rs 202-crore unit at Jellingham near Haldia. Theagreement between the two partners is to be signed in the current month itself, according to railway sources.
At Jellingham, Burn Standard has about 128 acres of land , of which about 35 acres will be used to set up a steel foundry for producing 10,000 bogies and 10,000 couplers annually and the Railways has promised to buy 50 per cent of the production targeted to start in 2014.
The unit will employ about 300 people. The technology is to be provided by RDSO, the research wing of the Indian Railways.
feasibility study
RITES has prepared the feasibility study already approved by the respective boards of the two organisations.
At a debt equity ratio of 70:30, Burn Standard will require about Rs 30 crore for participation in the equity of the proposed joint venture.
The company has been urged to approach the Railway Board for funds, which have to be provided through a supplementary budget, it is learnt.
The tenders for the construction of the foundry will be floated once the joint venture is formed.
On Sunday, Mr Keshav Chandra, Member (Mechanical), Railway Board, and Mr A.K. Verma, General Manager of South Eastern Railway, visited the project site.
The Managing Director of Burn Standard and the senior officials of SAIL and West Bengal Industrial Development Corporation, among others, were also present, add the sources.