Steel secretary AK Basu said that the entire amount will be invested in upgrading the facility at Bhilai to manufacture specific-quality rails for fast trains with longer axles.

The railways last week had agreed to buy the entire quantity of 60-kg rails produced by SAIL as per specifications after a meeting between railway minister Nitish Kumar and steel minister Navin Patnaik.

SAIL has already invested Rs 140 crore, while another Rs 100 crore will be spent in ladel-heating furnace, on-line ultrasonic testing machine and ad-current testing machine.

The railways had also earlier assured SAIL of buying their entire requirement of 52-kg rails totalling 2.8 lakh tonnes, Basu said. This is expected to give some breathing space to SAIL in view of sluggish domestic and international markets in the first quarterof current financial year.

Last year the PSU major supplied 3.3 lakh tonnes of 52-kg rails and 0.7 lakh tonnes of 60-kg rails.This year, however, railways expressed the desire to import 60-kg rails. After an assurance from SAIL to supply as per specifications, the railways agreed to pick up the entire quantity of 60-kg rails.

Pending the upgradation, likely to be completed next year, SAIL has offered to supply 60,000 tonnes of 60-kg rails of railways' specifications. The remaining rails will be imported by the railways. At the meeting, the two ministers also discussed the possibility of sail and railways entering into a joint venture along with an international producer.