The Indian Railways is considering ending state-owned Steel Authority of India Ltd (SAIL)’s virtual monopoly on supplying steel for standard rail tracks. This would open up annual acquisitions worth up to USD 700 million to the private sector.
According to SAIL officials, a sudden jump in demand for steel to replace old tracks meant it was struggling to meet production targets. In the current fiscal year, SAIL is set to fall around 250,000 tonnes of rails short of its 850,000 tonne target, according to the company’s data – its eighth shortfall in 10 years, and its biggest.
The Indian Railways has already wrote to the steel ministry that oversees SAIL, threatening to sever a deal to buy rails almost exclusively from the company.
The biggest likely winner from opening up to private suppliers is Jindal Steel and Power Ltd, which already offered in March to help the Indian Railways with steel for its modernisation.
Share on:
