All the three companies participated in a global tender floated last year. The rail will be supplied at a price of $400 per tonne f.o.b.Of the total quantity, around 30,000 tonnes will be supplied by British Steel to the Railways.

The Railways plan to procure another 4.67 lakh tonne rails this year entirely from Steel Authority of India's (SAIL) Bhilai steel plant at an approximate cost of Rs 1,000 crore.

As per an announcement made by railway minister Mamta Banerjee last year the Railways would not be importing rails. However, in the past, imports were resorted to only when SAIL was not able to supply the required quantity. The Bhilai plant has assured the Railways that it will be able to supply the full quantity this year.

On an average, the Railways procure 4 lakh tonne of rails annually which is used up for about 4,000 km of railway line. Out of this, major portion is used on account of replacement and the remaining for new lines.

According to a railway official, rail manufacturing is not a very viable business for the private sector unless the demand is huge. SAIL's Bhilai plant had set up rail manufacturing facility in the 1950s through Russian collaboration.

Jindal Steel & Power plans to break SAIL's monopoly by manufacturing rail for the domestic market from the next year. The company, which will manufacture 78 metres long rail, is acquiring one of the largest rail and structural mills - Iscor in South Africa and is relocating it near Raigarh in Madhya Pradesh.

The Railways stopped buying rail from SAIL for a brief period of about four months last year after the Railway Safety Commission pointed finger at the quality of rails following an accident at Khanna in Punjab.

The purchases were resumed in April 1999 after quality specifications were met by SAIL. "We have no reason to depend on imports unless SAIL deteriorates in quality," said a senior railway official.

According to the official, the specifications are on par with UIC norms. Quality inspections are carried out by the director general of supply and disposal, under the ministry of industry.

The Railways have now decided to rope in its undertaking RITES Ltd for carrying out the inspection. Besides, SAIL has its own quality monitoring mechanism. A director level official from the Railways is permanently stationed at the Bhilai plant.

Rails are directly procured by the Railway Board and is distributed among the zonal railways as per their demand and budgetary support. In case of imports, global tenders are also floated by the board.

There are two types of rails which are in use - 52 kg and 60 kg per metre. The entire demand is for 52 kg rails is met by Steel Authority of india Limited while for 60 kg a small quantity is imported.

The two qualities of rails are used as per the traffic density on a particular section. Besides the Indian Railways, other buyers of rails include ports, companies with their own railway yards and metro rail corporations.