ESCO Readies 2nd Batch of U33 Rails

EghtesadOnline: Esfahan Steel Company has produced the second batch of rails to be delivered to the Islamic Republic of Iran Railways.

News ID: ۷۸۳۴۰۸

28 July 2018

The batch contains 1,000 tons of U33 rails as part of ESCO's commitment to produce 40,000 tons of tracks, the steel company's marketing and sales manager, Ehsan Dashtianeh, said.

"We have informed IRIR authorities that we are ready to deliver the rails at their request," the official told ILNA on Wednesday.

"Rail production speed has reached a favorable pace and [in terms of quality] 98% of the recent batch met the highest standards in the preliminary inspection."

According to Financial Tribune, ESCO delivered 500 tons of U33 rails to IRIR on July 17.  The rails were produced using the latest technologies, according to ESCO's managing director, and were based on Europe's EN13674 standards.

"Producing rail based on the latest European standards was painstaking and complicated, and yet worth the pain to achieve self-sufficiency," Mansour Yazdizadeh added.

U33 rail tracks are capable of supporting a speed of up to 160 kilometers per hour.

The official emphasized that ESCO is capable of meeting all of IRIR's demands with a rail output capacity of 400,000 tons per year and will export its excess production.

Yazdizadeh also claimed that the rails' quality has been approved by a third foreign party, Bureau Veritas Group, a Paris-based testing, inspection and certification company, IRNA reported.

ESCO signed a contract with IRIR to produce 40,000 tons of U33 rail tracks in October 2016, 10,000 of which were to be delivered by the end of the fiscal 2016-17. The company repeatedly missed the deadline and extended it to date, and mostly blamed IRIR for not funding production by making a pre-purchase deposit.

According to Dashtianeh, IRIR also placed orders with ESCO for the production of UIC60 rails in the last fiscal year (March 2017-18).

UIC60 rails are capable of supporting much higher speeds compared to U33.

"Manufacturing UIC60 rails is one of the country's priorities and there are no obstacles to Zob Ahan (ESCO's Persian name) shifting from U33 output to UIC60," he said.

In fact, the steelmaker launched a new rail production line in late 2016 in cooperation with the German Kuttner Company, claiming that it is ready for UIC60 output.

Dashtianeh claims that the delay in starting UIC60 output is primarily due to getting tangled up in bureaucracy and the fact that IRIR is asking to revise the deal's terms. He did not specify IRIR's demands.

He did, however, say that ESCO is looking to update the deal's cost, as the foreign currency exchange rates have changed dramatically.

"Initially, the deal was supposed to be based on foreign currency ... yet it was changed to its rial equivalent of the time. This product is priced much higher now as per the current official forex rate," he said.