Railways signs Rs2,500-cr `Make in India’ deal with SAIL-RITES wagon unit

Indian Railways on Tuesday signed an assured offtake agreement with SAIL-RITES Bengal Wagon Industry Pvt Ltd (SRBWIPL) for manufacture and rehabilitation of wagons at Kulti, West Bengal, which is in line with the government's `Make in India' initiative.

The signing of the agreement has paved the way for commencement of production of stainless steel wagons at the factory.

Speaking on the occasion, minister of railways Suresh Prabhu said the agreement is a very significant landmark two major central PSUS - RITEAS of ministry of railways and SAIL of the ministry of steel. 

RITES and SAIL have come together to set up a joint venture which is a Rs2,500 crore `Make in India' initiative, he said, adding that he expects the factory to manufacture most modern wagons required for expansion of Indian Railways and emerge as a centre of excellence for development and manufacture of special purpose wagons for domestic and international market.

Prabhu said that it will contribute to the economic development of the region and lead to employment generation and creation of ancillary industries. He pointed out that increased consumption of steel would spur demand for iron ore which in turn would increase freight traffic of the Railways.

He said the Railway should also consider other options like using aluminium for manufacturing wagons.

The SAIL-RITES wagon project was announced in 2010-11 and subsequently a 50:50 joint venture was set up between the two major PSUs namely, SAIL and RITES. The land for the factory, which is ready for production, has been provided by SAIL and has been constructed at an approximate cost of Rs120 crore. This project combines manufacturing and infrastructure expertise of SAIL and RITES with Indian Railway's commitment and support of Make in India initiative.

This is a long term assured offtake agreement for manufacturing of 1,200 wagons per annum and rehabilitation of 300 wagons per annum for a period of 10 years. The total cost of the assured offtake will be about Rs2,500 crore. This factory is likely to generate employment for about 400-500 people and will provide skill development opportunities for local people. Secondary and tertiary opportunities also become available which will lead to economic growth and all round development of the area.

The plant is equipped with high-end state-of-the-art machinery and plant to achieve quality as well as productivity and it is expected that it will emerge as a centre of excellence in wagon manufacturing with high capacity new design wagons.