New Delhi: State-run steel maker RINL and the Railways will soon sign the final agreement, involving key issues like land lease and pricing, for setting up the Rs 350-crore axle plant in West Bengal, sources said.
Earlier this year, a memorandum of understanding was signed by Rashtriya Ispat Nigam (RINL) and the Railways. The work on the plant, however, could not take off as the two are sides had not signed the final agreement involving issues like off-take, land lease and pricing.
"The final agreement between the two will be signed very soon. The two have already reached an understanding on pricing, off-take and land lease. These were coming in the way of the axle plant," a source in the steel ministry said.
The required 50 acres of land for the proposed plant will be provided by the Railways. It will have up to 50,000 axle-making capacity in a year -- all to be consumed by the Railways itself.
"Keeping in mind the viability of the project, RINL had requested the Railways for increasing the assured off-take of up to 40,000 axles from 20,000 indicated in the MoU," he said.
The axle plant, proposed to be the second largest in the country, will also manufacture other products for the use of the Railways and other sectors. Rail Wheel Factory at Bangalore is the largest axle-making facility in the country.
The plant, likely to be operational by the end of 2013, would eliminate the Railways' reliance on imports and help the country to achieve self-sufficiency in axle making.
The source said the plant would be a unit of RINL and not a subsidiary of the steel maker as was proposed earlier.