The joint venture will produce 1,200 railway wagons annually at Kulti in West Bengal
Steel Authority of India Ltd. (SAIL) on Tuesday inked an agreement with RITES, a subsidiary of the Indian Railways, for jointly setting up a railway wagon-making unit in Kulti in West Bengal at a cost of Rs. 120 crore.
“The joint venture between the two PSUs is mutually beneficial. It will lead to many more such collaborations between them,'' Union Steel Minister Virbhadra Singh told reporters here after the signing ceremony.
Steel Secretary P. K. Mishra, Railway Board Chairman Vivek Sahai and RITES Managing Director V. K. Agarwal were among the senior officials present on the occasion.
Mr. Singh said there were plans to form five such joint ventures for wagon manufacturing and the SAIL-RITES collaboration was the first in line. The wagon manufacturing unit, which is likely to start operations in the next 14 months, would have an annual production capacity of 1,200 wagons.
“This is a red-letter day in SAIL's history, as every year there is a shortfall of 6,000 wagons. This 50:50 joint venture will help bridge the gap,'' SAIL Chairman C. S. Verma said.
For the project, SAIL will provide its surplus land in Kulti, near Burnpur, in West Bengal. The location of the plant would be near the Chittaranjan Locomotive Works. SAIL, which has an annual production capacity of about 14 million tonnes, will also supply its specialised steel products to the proposed wagon-making unit.
Railway Minister Mamata Banerjee had earlier said the tentative name of the factory would be the Bengal Wagon Industry.
The present wagon demand in the country is around 25,000 units and it is expected to rise further once the dedicated freight corridors start coming up.
Meanwhile, seeking to further expand their cooperation, International Coal Ventures, a consortium of PSUs such as SAIL and Coal India has joined hands with RITES to prepare a feasibility report on the possible buyouts of coal blocks in Indonesia and Mozambique.
“ICVL is collaborating with RITES for coal mines in Indonesia and Mozambique. The joint team will leave for Indonesia soon,'' Mr. Verma told reporters here.
As per the agreement, RITES will prepare the feasibility report on setting up necessary infrastructure for transporting coal mined by ICVL. Mr. Verma is also heading ICVL, a special purpose vehicle set up in 2008 for scouting and acquiring coal assets abroad.
Asked if RITES can come out with an IPO in the current fiscal, the Railway Board Chairman said: “It will depend on how we are going to do in Mozambique and other African countries. The IPO was required for an activity in African nations and we may do it in the proper time when we are sure of the commercial return of our investments in that nations.''