The Railways have rung alarm bells saying that the continuing poor performance by state-run steel companies may adversely impact its bottomline, forcing it to seek steel ministry’s intervention.
In a letter to steel secretary DRS Chaudhary on August 21, the Railway Board has reminded that steel sector contributes to 20 per cent of the originating traffic for the Railways and it relies heavily on integrated steel plants owing to their significant volume of inward and outbound cargo. But the deteriorating performance of these plants this financial year, particularly those in the public sector like Steel Authority of India Ltd (SAIL) and Rashtriya Ispat Nigam Ltd (RINL) have triggered serious concerns in the Rail Bhawan.
The Railway Board cited that SAIL has registered a 0.8 per cent growth in production of saleable steel for the April-July period this year over the corresponding period last year. This is about 4 per cent less than its target. “In case of RINL, production during the April-July period was even less than the same period last year. The performance of public sector entities has become a matter of serious concern as it is severely impacting the freight loading of Indian Railways. During the current month, there is further deterioration in overall demand, including those of the private plants, resulting in idling of wagons,” the board contended in its letter.
Steel minister Beni Prasad Verma has expressed his anger on the delay in executing its expansion and modernisation programme worth Rs 70,000 crore. On May 22, the minister had warned of “administrative action” against SAIL if the company fails to complete the programme in time.
“According to the ministry’s estimate, SAIL has sustained delay in executing its expansion exercise by more than two years which includes cost overruns,” Verma had told
The Indian Express.