Autokast hopes to turn around with a railway order

Autokast hopes to turn around with a railway order

Cherthala: The order won by Autokast Limited for constructing wagon structures for the North Western Railway is expected to breathe new life into the Cherthala-based ferrous foundry manufacturing unit, while also acting as a catalyst for the industrial development of Kerala.

Autokast, an undertaking of the Kerala government, won the tender to manufacture 5 per cent of the total number of casnub bogies (used in freight stock) required for the Punjab Zone of North Western Railway. If the products match the required quality, the public sector unit is likely to have the tender extended to make 20 per cent of the bogies required.

“The manufacturing of railway bogies will begin at Autokast this year. The bogies for Punjab zone of Northern Railway will be manufactured at the first stage," said Dr Thomas Isaac, Kerala Finance Minister.

Upgradation in the offing

Autokast will upgrade its unit with a new hydraulic press and install a new electric arc furnace and a heat treatment plant to prepare itself for the new work. According to its officials, the work will begin as soon as the Railways share with them the details of the bogies. As per the preliminary information, around 15 bogies will need to be manufactured.

The crisis-ridden unit acquired the Class 'A' certificate from the Lucknow-based Research Design and Standards Organisation (RSDO) after it undertook several measures to modernise with the help of the state government.

The Class 'A' Foundry certificate labels Autokast as one with the capacity for an annual production of 4800 metric tonnes of steel casting. This also qualified the unit to take part in the open tender of the Railways. Despite the stiff competition, Autokast bagged the tender, becoming the first public sector unit to do so.

“The management is striving to make Autokast profitable. Completing the Railway’s orders on time will help to bring in more orders. We will also raise the existing metric tonne parameters for making the unit profitable, said K.S. Pradeep Kumar, Chairman, Autokast.

The unit currently has 380 permanent employees and 170 daily wage workers including technical experts. 

Losses all the way

Autokast Limited had been in the red lately. The company was, until now, only taking small orders from state government institutions and some private companies. There were also a few international orders, but not enough to raise the monthly production. The production remained still at 300 metric tonnes.

The biggest liability for Autokast was in the purchase of raw materials, incurred to various companies. The usual practice was to purchase raw material, carry out manufacture as per the orders taken, and utilise the revenues for meeting the company's expenses. However, the company could not pay for the purchase of raw materials and liabilities piled up. 

The liability incurred to the KSEB alone amount to around Rs 129 crores, from 1983 onwards. There are also other dues, like the instalments of the employees' pensions, PF, ESI as well as other tax payments. At present, the company gets only the financial support of the Kerala government.