Railway track plans held up on price hitch

NEW DELHI: Railways is incurring a loss of around Rs 1,800 crore per month on its track expansion projects due to non-availability of sleepers (the concrete bar used in laying rail tracks). The production of sleepers has declined from 5.36 lakh in April to just 49,000 in July 2008. The decline has been due to a tussle between the Railways and sleeper manufacturers over pricing.

While the railways is offering Rs 1,400 for a sleeper, the manufacturers are demanding Rs 1,500 to compensate for the rising input costs. Around 78 companies which manufacture sleepers for the railways have stopped production to protest against low prices.

���The railways offer all manufactures a uniform rate. In the last one year the steel prices have shot up considerably. Steel cost in manufacturing sleeper is around 60%. In December, the railways offered us Rs 1,130 per sleeper, which was revised to Rs 1,400 per sleeper in July. However, the prices since then have substantially increased. We have been suffering a loss of more than 50% since January this year,��� said a sleeper manufacturer.

Sleepers are concrete slabs that are fitted like the rung of a ladder between the tracks. They are an essential component while laying down a track as they absorb a substantial portion of the weight of the trains. The government had earlier turned down the request of these companies stating that the manufactures have formed a cartel and there was no need of revising the prices.

With most manufactures, which used to produce 40,000 sleepers on an average per month, either closing their operations or planning to do so, the government has now decided to look at the issue afresh. According to sources in the rail bhawan, a meeting will be held next week to resolve this issue and a decision will be taken within this month.

Currently, railways is unable to lay fresh 600 km track per month or repair the existing tracks. The average cost of laying a track is Rs 3 crore per kilometre and around 1,700 sleepers are fitted in a stretch of one kilometre.
It���s not only the private players but the two government factories in Khalispur and Subedaergaon (Uttar Pradesh) which have also seen a decline in their production.

���Since most of these factories are captive units located on leased land form railways, we���re forced to continue the production. However, since the loss has been overburdening, most of the manufactures are closing their units,��� a factory owner said.