Scrimps on rolling stock replacement

At Rs 14,120 crore, allocation to rise by a measly 0.07 per cent from last year.

The railways’ strained financial resources were reflected in Mamata Banerjee’s meagre increase in allocation for rolling stock for 2011-2012.

It is to rise, overall, by 0.07 per cent from last year’s, to Rs 14,120 crore, with much of it for programmed deliveries for which orders have already been placed. Allocation for new acquisitions is to drop by 56.4 per cent in 2011-2012 as compared to last year, to Rs 162.5 crore from Rs 373 crore.

For purchasing wagons, the railways plan to spend Rs 55.5 crore in 2011-2012, a fall of almost 72 per cent from the 2010-2011 Budget estimates of Rs 199.75 crore. The number of wagons to be purchased has been kept unchanged at 18,000 units, much against the market expectation of doubling this.

The target for procuring coaches has also been slashed from 3,210 units in 2010-2011 to 2,455 units in 2011-2012, while that for diesel locomotives has been increased from 50 units to 85 units in 2011-2012.

Investment in rolling stock is a key requirement for handling more traffic, though a major portion goes on replacing older vehicles. With the economic recovery in place, the railways expect more traffic to flow, but the provision for adding rolling stock has been disappointing for the industry. Stocks of major companies catering to the railways dropped sharply immediately after the Budget presentation.

Texmaco, trading at around Rs 42.35 before the Budget, dropped by 13.6 per cent after the announcement, while those of Kalindi Rail Nirman shed 15 per cent. Titagarh Wagons, trading at around Rs 391.20 before Mamata Banerjee stood up to deliver her speech, fell by 12.8 per cent after it.

The minister said she was allocating more for setting up rail-based industries across the country to meet the rising demand for rolling stock. “Rising demand for coaches, locos and wagons cannot be met immediately because their manufacture requires components whose production has to be planned well in advance,” she said.

Adding: “Even some key material and components for rolling stock are not readily available in the country and we often have to depend on imports. As a result, supply of rolling stock has been falling short of our requirements. Even now, it is not available according to our requirement. To meet the demand of passengers for more coaches, MEMUs, DEMUs, etc, we have decided to set up rail-based industries.”