Railways to float another tender to procure steel
Drive for doubling, gauge conversion, track renewal and laying new lines has pushed up the demand for steel.
The Indian Railways has set in motion the process to procure 31 lakh tonne of steel as part of its massive drive for doubling and gauge conversion of railway tracks as well as for track renewals and laying of new lines in the next two years.
According to an official, the Railways had indicated a demand of 14 lakh tonne in 2018-19 and 17 lakh tonne in 201920. Responding to the demand, SAIL is likely to supply 10 lakh tonne during the current financial year and 12 lakh tonne in the next fiscal. However, because of the shortage in supply, the Railways may go in for a second global tender.
In India, there are only two steel companies which manufacture rails. The SAIL manufactures 260 metre-long rails at its Bhilai Steel Plant, while the Jindal Steel and Power Limited (JSPL) makes 121-metre-long rails at its Raigarh unit and can weld these rails up to 480 metre.
This is to be noted that SAIL was the only supplier of rails to the Indian Railways until JSPL bagged an order in July 2018 to supply 1 lakh tonne, following a global tender, which was floated for the first time.
The Railways is aiming for 4,000 km of track renewal in each financial year 2018-19 and 2019-20. The global tender was invited for procuring 4.67 lakh tonne of rails as SAIL was not in a position to supply the required quantity.
However, according to SAIL official, the Bhilai Steel Plant is being modernized and expanded along with other integrated steel plant under SAIL with capacity enhancement of crude steel from 3.93 million tonne per annum (MTPA) to 7 MTPA. This included 1.2 MTPA capacity Universal Rail Mill.
Notably, SAIL has established a Mill called “Universal Rail Mill” in Bhilai Steel Plant to enhance the manufacturing capabilities of Rails to cope up with increasing demand of the Railways. The production from the URM has commenced from November 2016.
Sources said in view of the shortage in supply of rails by SAIL, the Indian Railways has decided to float another global tender of 7.5 lakh tonne. The requirement of rails has gone up as the Railways has renewed its focus on track renewals following few accidents in the last two years.
During the first global tender, only JSPL was given an order of 1 lakh tonne which qualified under a clause in the tender which required 20% of rail to be supplied by an Indian supplier. However, foreign bidders like Sumitomo Corp, Angang Group International, Voestalpine Schienen, East Metals, CRM Hong Kong, British Steel France Rail and Atlantic Steel failed to qualify and therefore the orders could not be placed.