The announcement of the Railway Minister for collaborating with steel producers for their expansion plans is welcome. The growth plans of the steel industry, including those of SAIL, will need substantial additions to the railway infrastructure.
Over the last few years, the changes in freight classification on steel making inputs had substantially increased freight cost. We welcome the reversal of this trend. Freight reduction of 6% on on iron ore, limestone and dolomite is likely to have a positive impact of around Rs. 70 cr. annually on SAIL.
The announcement of dedicated freight corridors is also a positive step and, when completed, will help meet the growing transportation requirements of the economy.
Several other steps, as under, announced in the Rail Budget will help in increasing the demand for steel:
- Expenditure of Rs. 30,000 crs. for freight corridor.
- Wagon production increase by 10% including addition of 800 bogies to popular trains.
- Revamping of rail infrastructure and laying of new rail lines.
- Proposal of 3-tier freight container movement, etc.
- Conversion of most of the meter gauge to broad gauge track.
SAIL would be in a position to meet the increased requirement of the Indian Railways for different steel products.