No fund for wagons ?

In Bansal's budget, no allocations for wagons

Srinand Jha, Hindustan Times
New Delhi, February 13, 2013

Railways minister Pawan Kumar Bansal is looking at a tough budget this year. Facing a severe financial crisis, Bansal's budgetary proposals are likely to cut down on funds for new wagons.

Bansal is learnt to have pegged this year's sanctions under the Rolling Stock Procurement 

(RSP) at a mere Rs. 8,000 crore - approximately half the amount provided for in last year's budget.

Plans to procure wagons - money earners for the public transporter - have taken a back seat mainly owing to an outstanding balance against last year's sanctions for procuring 13,329 wagons.

Until February 1 this year, just 7,200 wagons had been inducted, while orders for an additional 2,500 wagons are likely to be placed next week.

"The remaining outstanding of 3,629 wagons against last year's sanctions can be fulfilled next fiscal. The Railways can also procure an additional 4,000 wagons by using the option of ordering 30% additional wagons - as against the orders placed", officials said.

Giving the wagons procurement plans a skip this year will adversely impact freight loading targets, sections feel.

One wagon is estimated to annually fetch revenues of Rs. 30 lakh. By making no provisions for wagons this year, the Railways are estimated to incur a loss of approximately Rs. 4,500 crore against its earning potential.

The decision could prove disastrous for manufacturers.

"For want of orders, wagon manufacturing units including the Sahibabad-based Modern Industries and the Hindustan Engineering of Kolkata have been on the verge of closure. If no funds are apportioned this year, other factories may face a similar situation", said a wagon manufacturer.