For the financial year 1998-99, the ministry placed orders for 17,535 four-wheel units, of which 8,225 were to the central public sector units and the rest 9,310 to the private sector. Orders under the own-your-wagon scheme were around 2,075.5 four-wheel units. However, in the later part of last year, the ministry stopped the orders which were not yet delivered. Thus orders for 1998-99 with the public sector stood reduced by 1,797.5 four-wheel units and with the private sector by 532.5 four-wheel units."Thankfully, all these orders have been restored and the payment for the supply of these wagons will start from next month. However, the price of these wagons have been reduced,"an industry source said.

The price of the wagons has been reduced because the ministry is using a later date to calculate the escalation factor for the wagon prices."When the initial orders for 1998-99 were placed, the date from which the escalation factor were to be reckoned was fixed at April 1, 1998. However, for the restored orders the date has been fixed at November 1, 1998. So we will be losing the escalation cost of seven months," the source said.The president of Texmaco Ltd, Ramesh Maheswari, told The Financial Express that this move of the railways was a breach of contract. The KK Birla company makes wagons and it was hit hard by the cut in orders.

"According to the agreement between the Union ministry of railways and the wagons manufacturers, the Government cannot reduce the price. The wagon makers are planning to take up this issue with the Government," Maheswari said.

The secretary general of the National Confederation of Officers' Associations of the central public sectors units, AlokeBrahmachari, was critical of the low annual wagon orders.

"The Ninth Five-Year Plan says that the Indian Railways ought to procure 24,000 four-wheel wagons annually, but the Government ordered only 17,535 wagons. This year, the ministry has noted that it will purchase only 18,750 wagons. Replacement requirements of the railways is around 18,000 wagons annually. Therefore, the railways is making no addition to its fleet," Brahmachari said.

He added that the ministry had failed to market its services in freight movements. Order placements were also not in line with the recommendations of the parliamentary standing committee.