ISA writes a SOS letter to Union railways minister Ashwini Vaishnaw, seeks hike in number of rake allocation to domestic players

Logistic burden hits domestic steel producers, raw material transport languishes

BY Swagatika Bhutia

BHUBANESWAR, FEB. 20: The Indian Steel Association (ISA) has submitted a letter to the Union minister of railways Ashwini Vaishnaw urging him to address logistics issues faced by domestic steel players. The Association, while raising many issues, has urged the minister to give priority to domestic steel producers having major dependence on rail corridors for raw material movement by allotment of more rakes.

“This shift will certainly give a fillip to the overall economic development and long term growth story of the nation at large,” the ISA wrote in the letter.

According to available data of rakes allocated to the Eastern Region from November 2022 to January 2023, there is a clear downward trend in rake maturity level for domestic iron ore users for steel plants against that of iron ore and pellet exporters which posts a significant hike.

“It states that while the indent maturity level of rakes for domestic iron ore users for steel plants came down from 60 per cent in November 2022 to 48 per cent in January 2023; in contrast, maturity level of rakes for export of iron ore and pellets has grown to 74 per cent in January 2023 against 57 per cent in November 2022.

Stating that the downward trend in allocation of rakes for domestic players was clearly an alarming sign and in violation of the philosophy of Atmanirbhar Bharat, the Association said the interest of domestic steel players was being grossly neglected vis-vis iron ore and pellet exporters, who are primarily aiding Chinese steel production thereby in defeating the tenet of ‘Make in India.’

“Allotment of rakes by the Railways is comparatively higher to least priority customers in whose case there is no check on use of iron ore by the consignees for the production of iron ore & steel at their manufacturing units. The whole system of rake allocation has been tilted in favor of diversion of iron ore for export purposes,” the ISA mentioned in the letter.

India’s robust steel industry aspires to attain the magic figure of 300 million tonnes (MT) production per annum in the next decade based on the vision embedded in National Steel Policy 2017. This is almost double the current capacity of 150 MT.

“Steel will be one of the prime movers of the economy as it has the potential of contributing more than 2.5 per cent to the Gross Domestic Product (GDP) of the nation. For this to materialize, around 500 MT of iron ore will have to be transported to the steel mills, out of which a whopping 300 million tonnes of iron ore will be produced and dispatched from the state of Odisha alone,” the ISA wrote in the letter.