Indian Railways takes another step towards satiating domestic coal & freight demand

The Indian Railways has recently taken another step towards satiating the domestic coal and freight demand by floating a large tender of wagons worth INR 35,000 Cr.. The tender so floated, is to add 1,00,000 BoxN wagons to the Railways’ operating assets over a period of 3 financial years, and had been in the pipeline since 2018.

According to a senior Railways Ministry official, the BoxN wagons are majorly used to transport coal. “Our budget estimates for freight increase were conservative. With the encouraging freight numbers in this financial year, we want to attain higher numbers both in this year and in the medium-term,” the official added

BOXN-AL BOXNAL wagons are BOXN wagons with an aluminium body on top of a steel under-frame and the aluminium alloy is ‘RDE-40’. These wagons are naturally lighter and allow a higher payload to be carried for the same axle load.

During the financial year 2021-22, the Indian Railways manifested 1,418.2 MT freight loading and earned INR 1.43 trillion, the highest ever recorded by the national transporter, and also 15% more than financial year 2020-21. According to the recent budget, railways aims to increase its annual freight loading to 1475 MT, with a projected revenue at INR 1.65 trillion in 2022-23.

The Railways, allegedly, fell short of 36 rakes per day for the supply of coal to thermal power plants – as per the Ministry data – which, when combined with the 20.5% increase in demand of coal (during 2021-22) justifies the public transporter’s decision to float the tender for new wagons.

Another reason that can be cited is the Ministry’s goal to diversify its freight basket, which contains huge portions of only raw materials currently. According to experts, last-mile connectivity and smooth operations for Railways are vital to attract corporate clients and add more finished goods to its basket.

The Government wants to increase the Indian Railways’ freight handling capacity exceptionally and its modal freight contribution to 45% by 2030 and the national transporter would need to account for over 3600 MT in 2031 to meet its NRP targets.

This new wagon procurement plan, when it comes to fruition will be a welcome step. The recently floated tender had been in the works for a long time, and it will lead to more investment in capacity upgradation. While another tall order like 100,000 wagons could test the industry, ramping up our capacity should not be a big challenge. As an industry, we can upgrade our production ability with a steady flow of orders.”

Ashish Kumar Gupta, Managing Director, Texmaco Rail & Engineering

Ashish also said that the public entity would need to replace 10-12 percent of its wagon fleet to overhaul its supply system. The decision will supposedly bear a positive outcome in the aspects of ameliorating freight capacity and breathing new life into the current fleet. While the plan is at a nascent stage right now, the anticipated demand for rail freight has given the ministry the impetus to go forward with it, the Railways Ministry official said.

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