Railways to float global tender to procure steel

The national carrier will buy steel from entities other than SAIL for the first time in 30 years

With an increase in demand for steel to build new railway tracks and upgrade existing ones, the Indian Railways is set to float a global tender this quarter to procure 250,000 tonnes of the commodity from private players.

This will be for the first time in close to 30 years that the national carrier will procure steel from entities other than Steel Authority of India (SAIL).

“We will float a tender this quarter. While our demand for the year is around 1.35 million tonnes, SAIL will be able to supply 1.1 million tonnes. Hence, we are going to procure steel from other players for the first time in three decades,” said an official source close to the development. 

The Indian Railways wants to renew tracks of 3,500 km at a cost of Rs 10,153 crore in 2017-18.

SAIL’s flagship unit, the Bhilai Steel Plant (BSP), is the only one from which the railways procures tracks. On average, the plant supplies 700,000-800,000 tonnes of rail to the national carrier. In 2017-18, the railways may require about 420,000 tonnes of rails for laying new tracks. This would be despite the new Universal Rail Mill (URM) at the Bhilai Steel Plant set up by SAIL at a cost of Rs 1,200 crore, adding another 2 million tonnes per annum to its capacity.

The new mill is equipped to produce a 260-metre-long rail with a single weld with improved surface quality, less residual stress and improved straightness.

The increase in demand from the railways follows this year’s Budget proposal in which the government laid out its plans to build more than 25 per cent additional tracks compared to the previous year. This comes at a time when Railway Minister Suresh Prabhu is laying emphasis on safety aspects. Prabhu has laid out an investment road map of Rs 8.56 lakh crore over the next 5 years. Of that, around Rs 1.27 lakh crore will be for safety. “In order to reduce derailment, we are introducing an ultrasonic fault detection technique, used in South Africa. This technique, which may cost around Rs 8 lakh per km, is having a trial run in the Moradabad and Allahabad divisions,” the official said.