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Railways looks beyond SAIL, to issue global tender for head-hardened rails

Railways looks beyond SAIL, to issue global tender for head-hardened rails
According to JSPL, its plant is capable of delivering 30,000 metric tonne of rails per month.
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Indian Railways, which has been tasked with commissioning 3,500km tracks in the next financial year, plans to look at global markets for the procurement of head-hardened rails.

These rails are used in corridors that cater to high-speed and heavy haul trains as they are more resistant to wear and tear. “We are planning to procure head-hardened rails from global markets. We will be floating a global tender by the end of March,” said a senior official at the ministry of railways requesting anonymity.

At present, railways procures steel for rail from state-run Steel Authority of India Ltd (SAIL), a public sector company and the largest integrated iron and steel producer in the country.

“SAIL doesn’t make head-hardened steel, we use 60kg ultimate tensile strength (UTS) rails from them. We will decide the quantity once the tender comes out,” said another official at the ministry of railways, also requesting anonymity.

The move by the ministry comes at a time when Indian railways, the world’s third largest rail network covering 66,000km, is upgrading steel usage in its tracks to 60kg per metre from the earlier 52kg. The additional steel per metre is required due to the increase in axle loads of freight trains to 25 tonne and the rise in average train speed.

InfraCircle had reported on 18 July that the national carrier plans to buy high quality steel worth around Rs.4,000 crore in 2016-17 from SAIL to upgrade its tracks compared with around Rs.3,000 crore that was spent under this head in the previous financial year. The railways commissioned 2,828km of tracks in financial year 2015-16.

Jindal Steel and Power Ltd (JSPL) in September last year in collaboration with SMS Meer, Germany became the country’s first manufacturer of head-hardened rails. JSPL is one of the seven global steel majors, who have the capability to manufacture head hardened rails in the world.

According to JSPL, its plant is capable of delivering 30,000 metric tonne of rails per month.

“Since it is in an open tender, Jindal Steel is open to participate in it. We will consider the best possible option. They have written to the ministry several times in the past over procuring steel for rails from them,” the second official said.

According to JSPL, India will require over 10 lakh tonne of head hardened rails for railway modernisation over the next five years.

“JSPL already supplies long rails to Dedicated Freight Corridor in India, as well as export markets. We manufacture rails of up to 121-metre length and head hardened rails in the state-of-the-art factory at Raigarh, Chhattisgarh. JSPL is India’s only private sector steelmaker producing “made in India” long rails and head hardened rails in line with its commitment to the ‘Make on India’ initiative,” a JSPL spokesperson said in an emailed response.

Queries mailed to the spokesperson of railways ministry on 6 March remained unanswered.

This also comes in the backdrop of the National Democratic Alliance (NDA) government mulling the idea of granting preferential treatment to India-made steel, as reported by InfraCircle on 15 February.

According to experts, JSPL would have the advantage of being a domestic manufacturer and also being a viable option for the railways cost-wise.

“A domestic manufacturer would have an advantage in terms of serving customer needs in a more timely manner. In case of imports, railways will have to procure early and stock the material because of the order lead time. So, a domestic manufacturer will have an edge and there could be some cost savings. If the government decides to use domestic steel in government’s infrastructure projects, Indian companies would stand to benefit,” said Jayanta Roy, group head, corporate sector ratings at ICRA Ltd.

 

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