The Railway Budget has evoked mixed reaction from the wagon industry with at least one player questioning the logic of creation of additional capacity when there is sufficient capacity in the industry to cater to the railways' demand.
Umesh Chowdhury, Vice-Chairman and Managing Director of Titagarh Wagons welcomed the increase in the freight loading target, saying that while this was an achievable target the railways would have to add on sufficient rolling stock to its fleet to meet this target. “This would be beneficial to the industry at large,” he said.
He, however, added that the “additional capacity creation by setting up new plants may not be desirable in the long run as it would result in sub-optimisation of capacity utilisation.”
The Indian wagon industry has sufficient capacity to cater to the railways' demand, he said.
Pawan Ruia, Chairman of Jessop, a wagon-maker, saw good tidings in the budget given the huge expansion proposed by the Union Railway Minister in suburban rail lines in Mumbai, Chennai, Kolkata, Delhi and Secunderabad. He, however, hoped that the shortfall in procurement target is taken note of this year.
Ramesh Maheswari, Executive Vice-Chairman of Texmaco, lauded the Minister for overcoming her difficulties and still managing to find resources for procurement of rolling stock worth Rs.13,824 crore including 18,000 wagons for the financial year 2011-12 to realise a target for freight loading of 993 million tonnes.
He welcomed the announcement of a number of projects in the public private partnership (PPP) growth mode, which would be most welcome but expressed concern over the high operating ratio.