Railways stops scrap sale, to recycle metal

Indian Railways has decided to stop sale of metal scrap to eliminate alleged corruption in the tendering process.

Instead, the Railways plans to use its factories to melt the scrap and produce steel to meet its own needs.

"We have decided to stop scrap sales and instead recycle it for our own use. Railways need special type of steel. It buys the steel at high cost as prices have gone up significantly in last one year. It hopes to save costs by recycling the steel," Railway board sources revealed.

The source alleged the tendering process had led to widespread corruption. "The action was taken to stop leakage in revenue," sources added.

The decision would hit the scrap trading market especially in eastern India. The business was allegedly dominated by the mafia.

Last week only, two persons were found killed while they slept in a train at Danapur, Bihar, while returning from Kolkata after participating in a scrap sale tender. The incident seemed to have prompted the move spearheaded by Laloo Prasad Yadav, central minister for railways.

"The former railways minister Nitish Kumar had tried to curb the criminalisation of the entire scrap sale process. He succeeded only partially. So it was decided to do away with the practice altogether," sources pointed out.

The recently-issued order only stopped sale of metal scrap but allowed sale of other scrap items. In Railways lexicon, scrap means any surplus items, obsolete item, unserviceable items and industrial waste.

In the last fiscal, the Railways recorded highest ever earning of Rs 1314.42 crore from scrap sale, surpassing the target of Rs 1,075 crore by almost 20 per cent.

Metal scrap constituted the lion's share of sales. According to Railways estimates, metal scrap sales fetched close to Rs 1,000 crore.

Several Indian Railways were equipped with scrap melting furnaces but these were usually grossly underutilised. Railways factories were located at Chittaranjan in West Bengal, Kapurthala and Patiala in Punjab, Chennai in Tamil Nadu, Bangalore in Karnataka and Varanasi in Uttar Pradesh.