"We are finalising the proposal to set up a wheel factory at Raebareli. The plant will be a joint venture with Rashtriya Ispat Nigam Limited (RINL)," a senior Railway Ministry official involved with the project said.
The proposed Rs 500 crore wheel factory is expected to be announced in the 2013-14 Rail Budget by Railway Minister Pawan Kumar Bansal.
"We are in discussion with the RINL for setting up the wheel factory near the rail coach unit at Raebareli," the official said, adding, "RINL will invest money, while Railways will provide land and other facilities like water and electricity."
The coach factory, a big-ticket project, was commissioned a few weeks after the Congress got the Railway Ministry after nearly 16 years.
The rail coach and wheel factories in Raebareli are expected to generate job opportunities in the area.
RINL is also setting up an axle factory at New Jalpaiguri and an MoU has been signed with the Railway Ministry for it.
About the availability of land for the wheel plant, he said, "A portion of the existing land at Rail Coach Factory will be utilised. Some more land can also be acquired near the factory."
Railways had acquired 541 hectares of land for the modern rail coach factory, of which 283 hectares belonged to private land owners.
Raebareli wheel plant is expected to produce 50,000 wheels in a year for coaches, wagons and locomotives. There are two wheel factories at Durgapur and Bangalore.
Railways requires more than three lakh wheels a year for its ever increasing number of trains.
Currently, it depends upon import of wheels from China and Europe to meet its requirement as domestic production falls short of the total target.
Besides Raebareli, another wheel factory at Chhapra is also going to be operational shortly. The Rs 1,500 crore Chhapra wheel plant is being equipped to manufacture about one lakh wheels per year.
Once Chhapra and Raebareli wheel plants become functional, Railways will not have to depend on imports anymore, said the official.