For four years, Jindal Steel & Power Ltd’s overture to sell steel to India’s largest customer - Indian Railways - met little success.
The sticking point between the Railway Board and the company was over the technology used to reduce the content of hydrogen in finished rails. The presence of the colourless gas is believed to increase the likelihood of the metal cracking, which the board said posed high accident risks.
No competition: SAIL’s steel plant at Bhillai in Chhattisgarh produces 880,000 tonnes of finished rails every year. At present, Indian Railways buys all of its rail steel from the state-owned company.
Now, Jindal Steel plans to pitch the railways anew, having comissioned a new degasser and seeking approval from the Lucknow-based Research Design & Standards Organization (RDSO).
Vikrant Gujral, the company’s vice-chairman and chief executive, said the new rails will start rolling out from its Chhattisgarh plant in the first week of December.
In 2003, the company, with sales of more than Rs3,000 crore, set up a steel mill in the state’s north-eastern town of Raigarh to produce heavy beams and rails. It installed a tank degasser, which allows for hydrogen checks while steel is still in a liquid stage and meets European railway standards known as UIC 60.
But Jindal officials say the Railways still disapproved of the technology, saying its rails needed a specification that checks for homogenous distribution of hydrogen part by part rather than in one full sweep.
Railway officials declined to comment.
Hydrogen, an official of RDSO said, is as “like having a fissure in a bone. If hydrogen is present, if forms a bubble and tends to crack when force is applied to the metal.”
Jindal’s steel mill is capable of producing 120m rails, which are the longest size and need less welding fixes. Demand for them is expected to rise with the construction of high-freight corridors and other infrastructure projects.
At present, the railways buys all of its rail steel from the government-run Steel Authority of India Ltd (SAIL), the country’s largest producer.
SAIL’s steel plant in Bhillai, also located in Chhattisgarh, produces 880,000 tonnes of finished rails a year. Of this, Sail supplies 700,000-800,000 to the Railways every year, the rest to private consumers, including metros in Kolkata and Delhi.
With clearance pending, Jindal has been producing a fraction of that—1,500 tonnes of finished rails a month until now to private consumers as Essar Steel Ltd and Tata Steel Ltd. These companies mostly use the rail to build tracks, or sidings, to transport materials around plant sites.
“Our first preference will always be the railways as these large rails cannot be exported,” said Gujral.
Jindal estimates that once it gains clearances, its capacity for the 120-metre rails will be 300,000 tonnes of year.
Currently, its materials are inspected by RITES Ltd, a consultancy under the Indian Railways. RITES also declined to comment.