India’s SAIL signs contract to export rail tracks to Iran

State-run Steel Authority of India (SAIL) has secured a contract with the country’s State Trading Corp (STC) to supply rails for a major railroad expansion project in Iran.

According to a report by the Business Standard on Tuesday, the contract will allow SAIL to supply about 100,000 tonnes of rails to Iran from its main plant, Bhilai Steel Plant (BSP), which is the sole producer of rail for the company.

While the plant supplies rails to Indian Railways in 13- and 26-meter lengths, the contract signed for Iran requires export of rails in 18-meter finished lengths.

At present, BSP does not produce 18-meter rails, which has been demanded by Iranian authorities. Therefore, to meet Iran’s order, the plant is in the process of installing new equipment to facilitate the supply.

“Special equipment is being procured from overseas suppliers for creating new facilities in the existing Rail and Structural Mill of BSP,” a company spokesperson told Business Standard.

The spokesperson, whose name was not mentioned in the report, added that in addition to a new Hot Stamping Machine coming from Germany, BSP is also buying a new Non-Destructive Testing (NDT) facility from Austria.

BSP had earlier exported steel to Iran in 1967, 1969 and 1976 to a total quantity of 275,000 tonnes.

On October 13, Managing Director of the Islamic Republic of Iran Railways Mohsen Pourseyyed-Aqaei announced that the country is planning to invest USD 25 billion in modernization and expansion of its rail network.

Iran is planning to increase its track length to 25,000 kilometers by 2025 through an investment of USD 25 billion.

“We have defined about USD 25-billion worth of rail projects for which we have prepared incentive packages to attract domestic and foreign investment,” he added.

The plan aims to increase the country’s track length from the current figure of about 15,000 kilometers to 25,000 kilometers by 2025.

SAIL, along with Jindal Steel and Power Ltd., had signed a contract worth USD 233 million last October to export rail tracks to Iran.

Iran subsequently asked India’s State Trading Corp (STC) to consider discount on the rail price after being offered by Turkey and countries in Europe to supply the equipment at a lower price.

SAIL relented after an Iranian delegation visited the country earlier in May to seek concessions and threatened to snap the contract.

SAIL could not hold the ground after initial reluctance to renegotiate the contract, slashing the price by 7.3 percent to USD 217 million.

By Press TV