Sponge iron makers hit by shortage of railway rakes



Source: THE NEW INDIAN EXPRESS

Acute shortage of railway wagons has hit supply of raw materials to sponge iron and steel industries in the State.

As majority of sponge manufacturing units are facing the problem of receiving iron ore and desptach of their products to different destinations in the country due to rake shortage, the Sponge Iron Manufacturers Association (SIMA), an umbrella organisation of ore based metallic and steel industry, has asked the State Government to take up the issue with Railway Ministry.

Drawing the attention of the Steel and Mines department to the problems faced by the sponge iron units, SIMA Executive Director Deependra Kashiva said, “Many of our Odisha members have been facing acute shortage of supply of railway wagons which is affecting their competitiveness.”

Noting that the average availability of rakes witnessed a fall of 24 per cent in the second half of 2017-18 compared to the first half of the financial year, Kashiva said transportation  of raw materials on road added to the cost of the manufactures.

While the average availability of rakes per month from April to September in 2017 was 308, it came down to 234 rakes per month during October-March period of the last fiscal.

“With domestic coal supply in a mess due to acute shortage of railway rakes, sponge iron manufacturers mostly depend on imported coal.

As the landed cost of imported coal has gone up, cargo transport from Indian ports has further escalated the cost,” said Chairman of Odisha Sponge Iron Maufacturers Association PL Mohanty. Since the sponge iron industry comes under non-core sector, it does not get priority to get required railway rakes. This results in to inventory buildup at posts leading to additional cost, he added.

“The sponge iron manufacturers are forced to transport their cargo from far off ports like Gangavaram in Visakhapatnam by rail and transport cargo on road from Paradip port which escalate cost in addition to operational difficulty,” Kashiva said.

The Centre’s ambitious plan to increase the steel capacity of the country to 300 million tonnes and crude steel production to 255 million tonnes by 2030 cannot be materialised if the problem faced by the secondary steel sector which contributes nearly 50 per cent of the entire steel production is not resolved, he added. Odisha, Jharkhand, Chhattisgarh and Karnataka are the key steel producing States in the country.

Source: THE NEW INDIAN EXPRESS