When train parts run their course

Manish Shaw has been buying and selling scrap parts of trains for 20 years from his godown in Mazgaon. Ganesh Shirsekar

Other than sale of tickets, a significant contributor to the railways’ revenue is the monthly auction of scrap parts. Generally, parts of a train such as coaches, rails, engines and different forms of cable wires, are considered scrap after being in use for 25 years, and are auctioned. Railways, however, preserves and reuse wheels, axles and bogies (chassi that carries the wheel set).

Tenders for the online auction are published in the newspaper. Till then, the parts are kept at a junkyard for examination. “Across India, there are 15-16 companies that bid for local train coaches,” said Manish Shaw, who has been buying and selling such parts for the last 20 years from his godown in Mazgaon. “We are notified about the scrap available through the tenders published in newspapers. If the companies are located outside Mumbai, the scrap is shipped to their respective warehouses. Sometimes, we re-model the scrap in the junkyard itself and sell it from there…”

“If a company doesn’t own a godown, the railways gives it 50 days’ time, after the auction is held, to dismantle and sell the scrap from the junkyard. If we exceed the time period, a ground rent is charged,” said Naeem Hassan, who owns a godown in Mazgaon. Scrap dealers search for copper in the old parts as it fetches more money. “Copper hardly makes for ten per cent of the total amount of the scrap sold. As much as 90 per cent of the scrap includes mild steel. So, in a spare coach that weighs 26 tonnes, copper would make for at least 1.5 tonnes… As copper is expensive in the market, dealers try to attain most of it from the scrap,” said a senior railway official.

The dealers modify the steel of coaches into rods and use it for construction purposes. Railways store scrap of long-distance trains in depots and yards, including at Haji Bunder depot, Kurla carshed and Lokmany Tilak Terminus (LTT). Shaw said, “By January, auctions are conducted almost everyday as the railways has to meet its targets. On the date of the auction, we place our bids on the railways’ website.” Only Shaw and Hassan own godowns in Mumbai that deal in railway scrap. Dealers, however, complain that increasing competition is affecting their profit margin. “Since these auctions are held online, competition has increased as people bid from across the country… We end up receiving hardly two per cent of the profit margin as compared to the earlier 15 per cent…,” Shaw added.

The railways, however, earn nearly Rs 11 lakh per coach sold and subsequent amounts for other parts. A senior railway official, recalling selling coaches running on Direct Current (DC) last year, said, “Last year, we had converted the harbor line on the Central Railway from DC to Alternate Current (AC). This switch helped us sell at least 154 old DC coaches into scrap- which was the highest ever in so many years. We earned a decent amount through this.” In the coming years, however, less scrap will be generated as most of the trains are new, he added.

Electric loco engines fetch more returns as compared to any other technical parts. “As electric locos have the maximum amount of copper, it easily helps them earn Rs 60-70 lakh per engine. But, electric locos hardly come for scrap as they are not much in use,” the railway official added. However, some are of the view that not every possession in railways could be considered ‘scrap’. “The railways must devise a system to preserve some of the old coaches, parts of railways could hold a heritage value 50 years down the line. Selling them then would help earn 10 times more revenue. The first electric loco — 1,500 DC Sir Leslie Wilson parked at Heritage Gully of Chhatarapati ShivajI Maharaj Terminus — is a prime example” a railway official added.