The Railways are interested in buying around 20,000 locomotive wheels, which is a traditional import item, from DSP every year. DSP has spare forging capacity to take up the work but lacks sufficient machining capacity. Therefore, it is trying to finalise a working arrangement with HEC for machining loco wheels ordered by the Railways, managing director S B Singh told The Financial Express.

"We first approached our next door neighbour, the Mining and Allied Machinery Corp (MAMC), to take up the work. But the ailing MAMC has declined to accept the offer," Singh said.

The Railways generally import loco wheels from East European countries. It has decided to opt for indigenous procurement as in several cases the imported items were not up to the mark and the prices were too high. DSP has been chosen for thepurpose.

During a lean order period for its wheel and axle plant in the domestic market a few years ago, DSP developed locomotive wheels for the international markets. The wheels were meant particularly for the US, which was importing from Brazil and scouting for another source. However, the export initiative is likely to be shelved now that DSP will get orders from the domestic market.

Loco wheels are smaller than coach wheels and have to be a "zero defect" product. DSP has necessary forging capacity to execute the Railway order, but lacks sufficient machining capacity. Therefore, it has decided to offload the machining work to another party.

If HEC agrees to take up the job, it will have to invest on specialised CNC machines and utilise some of its trained manpower for the purpose. Since the wheel forging machine in DSP is the only one in the country and the likelihood of a domestic competitor is remote, it will be regular future work for both DSP and HEC.

Moreover, as the price offered by theRailways and accepted by DSP is less than the landed cost of imported wheels, the Railways is likely to continue placing orders provided DSP wheels are up to the mark.

Meanwhile, MAMC's refusal to accept the DSP offer has surprised the workers of the order-starved company set up with technical and financial assistance of the erstwhile USSR. "It has proved that the MAMC management does not have any faith on either themselves or on the workers. They do not even have the courage to take a risk and mobilise funds for installing specialised CNC machines required for machining loco wheels," an employee of the plant said.