Private wagon manufacturers are upbeat about demand improving with Coal India Limited (CIL) renewing efforts to procure its own wagons.
The public sector miner has revived its interest to have its own fleet of wagons under the General Purpose Wagon Investment Scheme of Indian Railways announced last year.
“Indian Railways has come out with a substantial wagon procurement plan and players such as Cebbco, Amtek, Texmaco, Titagarh Wagons, Jupiter Wagons and Oriental Foundry have secured orders in the tender process. Now there are talks that Coal India is exploring options of having its own fleet of rakes. This will further boost demand for wagons,” said a senior executive of a city-based wagon maker.
Coal India sources said the public sector miner over the last few years has been interested in having its own wagons and initiatives were taken in 2015 to procure 2,000 wagons (33 rakes) at an initial investment of Rs 500 crore and expected investment of Rs 5,000 crore.
However, the plans did not take off as there was no return on investment for the miner even as there were benefits such as faster coal evacuation and offtake.
The government has now allowed investment by companies, with a leasing option that is expected to fetch a rate of return of 7-8 per cent.
Wagons under this category will have distinctive colour schemes to identify the rakes. Moreover, the scheme offers a rebate of around 10 per cent on the base freight for 15 years.
A Coal India official said the miner currently has an average loading of over 200 rakes per day, growing year-on-year at around 5 per cent and with substantial part allocated to power generators, including NTPC. By investing in its own wagons and with a potential of earning a return on investment, the miner is considering its options.
“These wagons will carry coal on specified circuits only according to the scheme. There is a probability that SECL (with mines in Chhattisgarh and Madhya Pradesh) could be among the subsidiaries where such wagons could be introduced earlier,” said the official.
