INDIAN Railways (IR) has awarded a joint venture of public-sector companies Steel Authority of India (Sail) and Rail India Technical and Economic Service (Rites) an Rs 8.2bn ($US 98.5m) contract to supply 2000 open bogie wagons.

This follows contracts to supply 12,000 wagons of the same type that were awarded by IR in March to four private-sector manufacturers: Besco, Hindustan Engineering and Industries (HEI), Jupiter Wagons, and Titagarh Rail Systems.

HEI will supply 4500 wagons for Rs 19.2bn, and Titagarh 4463 wagons at a cost of Rs 19.1bn.

Expected to be introduced by the end of this year, the open bogie wagon is a new universal design developed by Jindal Rail for IR, intended to carry raw materials in one direction and return with crude steel in the other. India is now the world’s second-largest producer of crude steel, producing 125 million tonnes in 2023-24.

Failure to renew IR’s wagon fleet has, together with capacity constraints on the network, contributed to rail’s share of the Indian freight market remaining stagnant, although IR's freight income has improved in recent years.

The National Rail Plan sets a target of increasing rail’s market share from the present 27% to 45% over the next 20 years. IR’s efforts to grow its freight business have included a renewed focus on providing customised solutions for e-commerce companies, which will include fast trains dedicated to parcel traffic.

IR currently has around 318,196 wagons. Until a few years ago, it was procuring between 1500 and 2000 wagons a year from domestic suppliers, where the role of the private sector has grown.

Spending on fleet renewal has also increased. A total of Rs 410.9bn has been allocated to acquiring new rolling stock in 2023-24, out of a total spending budget of Rs 2.5 trillion.

“Rail logistics has been recognised by policymakers as the key to success and substantial investments have been made and planned in the railway infrastructure, which creates capacity, and consequently in the purchase and operation of rolling stock which uses the capacity created,” says Mr Umesh Chowdhary, CEO of Titagarh Rail Systems.

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