How Can Indian Railways Service the Steel Sector Better?

Abstract

The focus of this paper is on how Indian Railways can service the steel sector better. The steel sector is a core sector, with railways playing a critical role in its logistics. The paper examines the changing industry structure and brings to light the increased need for transportation, as compared to normal planning processes. Traditionally, crude and finished steel making was done in the same location by big producers having integrated plants. Now the industry has a large number of producers who primarily focus on crude steel making or finished steel making, necessitating the need for transporting crude steel to the finished steel makers. Even within finished steel making, there could be levels of value addition where the output of one finished steel maker could become the input for another. This has implications for the transporters including Indian Railways in formulating their strategies. Further, based on the growth projections of the steel sector and a possible increased share of rail transport, Indian Railways need to strategize for a six fold increase in traffic. This could be upto 1 billion tons of originating traffic by 2019-20. The papers examines the current issues in rail transport for the steel sector and proposes strategies for the way forward under the dimensions of infrastructure, technology and systems.