Date:22/08/2005 URL: http://www.thehindubusinessline.com/2005/08/22/stories/2005082200100600.htm

Back Despatches from SAIL plants dip but Rlys not worried

Santanu Sanyal

JULY and August (so far) have not exactly been excellent months for the Steel Authority of India Ltd (SAIL) as far as movement of finished products is concerned. The despatches of finished steel from its various plants dropped, causing a build-up in the stockyards. An estimated one million tonnes of finished materials, worth about a couple of thousand crore rupees, are believed to be lying in various stockyards.

Has it hit the rail movement, one might wonder. Not much, according to sources. The reason is that there has been no cutback in production, at least so far. Which means inward movement of raw materials into the steel plants, almost entirely by rail, has remained unaffected. Also, the dip in despatches so far has been around 10 per cent, entailing a drop in wagon demand of 72/73 (in terms of four-wheelers) per month.

In August, so far, the average daily evacuation of wagons carrying finished steel out of Bhilai Steel Plant has been 337 as compared to 368 last August. The corresponding figures for other plants are Durgapur 117 and 120 and Rourkela 99 and 159 respectively. In Bokaro, the picture is slightly different, 339 and 338 respectively. But if compared with the last month (July 2005), when as many as 356 wagons were despatched, there is a downward trend.

In July, total inward movement of raw materials by rail into all SAIL plants including IISCO, at 3.77 mt compared to 3.6 mt last July, showed a growth of five per cent while total outward despatches, at 8.17 lakh tonnes (8.65 lakh tonnes), fell six per cent.

Cumulatively, between April and July this fiscal, total inward receipts of raw materials into all SAIL plants including IISCO, at 15.53 mt as compared to 13.48 mt in the same period last year, grew 14 per cent. But the growth varies from commodity to commodity and plant to plant. Thus, there was 12 per cent drop in inward movement of indigenous coking coal while that of imported coking coal posted 44 per cent jump.

Between April and July this year, total outward despatches of finished steel out of all SAIL plants, including IISCO, at 3.4 mt (3.09 mt), increased 12 per cent.

For example, total despatches of all products out of Durgapur steel plant, at 4.12 lakh tonnes (4.18 lakh tonnes) during the period, showed a drop of about two per cent, and out of IISCO at 1.44 lakh tonnes (2.13 lakh tonnes), a drop of 33 per cent. The same IISCO posted 136 per cent growth at 33,000 tonnes (14,000 tonnes) in the despatch of pig iron during the period. In 2005-06, SAIL is expected to handle an estimated 65 mt of traffic as compared to 55.22 mt in 2004-05 — up 18 per cent. Of this, about 51.85 mt will be inward receipts (of raw materials) and 13.21 mt will be outward despatches of finished products. The figures for 2004-05 were 44.29 mt and 10.93 mt respectively.

In other words, the growth in inward movement of raw materials by rail, it is estimated, is about 16 per cent, and despatches of finished products about 21 per cent. As of now, the growth of receipts has been 14 per cent and of dispatches about 12 per cent.

The Railways is not unduly worried at it. Every year during the monsoon, despatches are affected. The situation improves in the second half of the year. And this year will be no exception. Meanwhile, the Railways currently holds a large number of idle wagons. It is estimated that 50,000 wagons are idle across the country. In addition to the seasonal dip in the demand for wagons, the shortening of the average turnaround time achieved through various measures too is believed to have led to the present situation.