Wagon makers demand infra push, more trains
Business News | Reuters
MUMBAI (Reuters) – India’s wagon makers have demanded speedy execution of rail infrastructure projects, clearing pending proposals for private participation and more passenger trains in the upcoming budget.
India’s rail budget, which allocates funds and announces reforms for the sector, is to be announced on July 3 by Mamata Banerjee, the newly-appointed rail minister.
"The Indian Railways need to ensure an increased contribution of the rail sector towards infrastructure creation and enhancing the growth pace of the Indian economy," the Associated Chambers of Commerce and Industry of India (ASSOCHAM) said.
The railway’s outdated technology, poor condition of its stations and increased competition from roads are some of the impediments blocking the growth pace of the Indian economy, ASSOCHAM said in a budget recommendation in June.
India’s economy grew 6.7 percent in 2008/09, its weakest in six years, well below 9 percent rates of the last three years.
The world’s second-fastest growing major economy is on a drive to improve its creaky infrastructure and boost rail connectivity between industrial hubs and major ports.
With a 63,327-kilometre long network, the railways forms an integral part of Indian life, transporting over 18 million passengers and over 2 million tonnes of freight daily.
While work on the west and the east dedicated freight corridors, spanning about 2,800 kilometres, has started, company officials said there is scope for a southern passage too.
"The railways now should look at the south, south-east and south-west corridors. There is huge cargo available, which is moving by road, which the railways must target," AK Vijay, vice president, commercial, Texmaco Ltd, said.
Currently, roads carry about two-thirds of the country’s total cargo, while rail carries just a third, Vijay said, adding, "This total lopsiding in freight movement has to be corrected."
Wagon makers such as Titagarh Wagons, BEML and unlisted firm Jessop expect a boost in spending on long-distance, faster passenger trains and new metro rails at India’s growing cities, to help gain orders.
They also demanded orders from the railways to be placed up to two years in advance to help planning for long-term production and to ensure timely deliveries of wagons. Currently, the railways places orders annually.
Rail operators, on the other hand, want stability in haulage charges to enable long-term contracts and reduce turnaround time, officials said.
"Frequent changes (in rates) cause problems for us. It’s not possible to pass on all the charge (to users)," Sachin Bhanushali, president of Gateway Rail Freight Ltd, a unit of Gateway Distriparks, said.
Arshiya International and Sical Logistics Ltd also have licences to run container trains in a market dominated by state-run Container Corp of India.
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