Railways to acquire forged wheel plant from RINL for Rs 2,300 cr

Visakhapatnam: The Indian Railways has set in motion efforts to ramp up production to reduce its dependence on imports after acquiring the forged wheel plant from fund-starved Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant.

As part of raising funds through a multi-pronged approach, RINL had put up for sale the forged wheel plant set up at Rao Bareli in Uttar Pradesh during the UPA government after investing nearly Rs 2,000 crore. The plant launched production three years ago after facing several hiccups during the pandemic.

The Railway Board obtained approval from the Ministry of Railways vide order dated April 15, 2024 for payment of Rs 746.45 crore to RINL for the work of “Rae Bareily fund requirement for proposed takeover of forged wheel plant” by MoR costing Rs 2,300 crore under umbrella work “acquisition.” The order copy, which is obtained by Bizz Buzz, states “the expenditure is chargeable to Pink Book Item No. 4e/MCF/2023-24--Rae Bareli-fund requirements for proposed takeover of forged wheel plant by MoR. This issues with concurrence of the Finance Directorate of MoR.”

RINL, the second largest steelmaker after SAIL under the Ministry of Steel has been cleared for privatisation by the Government of India vide in-principle decision by the Cabinet Committee on Economic Affairs in January, 2021. The trade unions of RINL and political parties are agitating since then against the privatisation decision while a section of BJP, the main constituent of NDA government at the Centre have been issuing statements that the decision has been put on hold to facilitate a turnaround. VSP, whose brand name Vizag Steel is well-known is incurring high production cost compared to other manufacturers for want of captive mines. It has jacked up production capacity over the years from 3 million tonnes to 7.3 million tonnes per annum with a total investment of around Rs 16,300 crore.

The forged wheel plant in UP with an installed capacity of 80,000 wheels per annum, industry sources said, is unable to increase production due to a host of problems. The Railways received just 2,000 wheels in FY23 forcing it to depend mostly on imports from Brazil, Russia, China, Ukraine, Japan, Romania and Czechoslovakia. The annual requirement is estimated at 80,000 wheels. Industry sources said that the MoR now is keen that the production at Rae Bareilly post-acquisition should be scaled up in phases. Forged wheels are made with large solid metal squares. SAIL also produces forged wheels and there is a proposal to produce 2.28 lakh wheels by Ramkrishna Forgings and Titagarh Wagons so as to stop import dependence and start exporting as part of Atmanirbar Bharat Mission.