With the railway ministry back in the hands of the Congress, railway minister Pawan Bansal has announced that a new factory will be set up in Rae Bareli to manufacture forged wheels for trains.
Rae Bareli, for long a pocket constituency of the Gandhi family, already has a rail coach factory. The wheel factory will come up alongside in partnership with state-owned steel maker Rashtriya Ispat Nigam (RINL). The project involves an investment of Rs1,000 crore, Bansal said after signing the memorandum of understanding on Friday.
The forged wheel manufacturing plant will help in reducing dependence on imports, currently pegged at around Rs350 crore every year, and will ensure employment for locals.
"It will provide employment for 500 to 600 people," steel minister Beni Prasad Verma said on the occasion, adding that the project will be a win-win for both railways and the steel manufacturer.
Railways need about 70,000 wheels a year and a little over 70 per cent of it is met through imports, at a cost of around Rs70,000 a wheel. The demand for such wheels is set to go up to one lakh by 2016-17 as more wagons and coaches will be pressed into service in the coming years, the ministers said.
The proposed factory will be the largest of its kind in India. RINL will set up the plant on 27 acres of land to be provided by the railways, which will also ensure full uptake from the plant. The raw material for the factory will be supplied by RINL's Vizag plant in the form of continuous cast rounds.
"The wheel factory along with the coach factory will generate good employment opportunities in the area. There will be also a new colony coming up for the Rae Bareli factory employees," Bansal said.
Earlier this week, Bansal had said that the railways was desperately short of funds and would take the PPP (public-private partnership) route for new projects. However the Rae Bareli project belies his words, as both entities involved are state-owned.