The Ministry of Railways has floated a global tender to procure seven lakh tonnes of rail, worth Rs 3,500 crore, instead of purchasing it from the Steel Authority of India, a public sector company, The Hindu reported on Wednesday. The government now procures rail solely from the Steel Authority of India.

“We floated a global tender on October 12 to procure seven lakh tonne additional rail, which will help us to ensure that the backlog of track renewal is cleared,” Railway Minister Piyush Goyal said. “We were not able to meet the demand for track renewal due to shortage of rail.”

However, he added that the government would continue to buy rail from the public sector firm.

Private steelmaker Jindal Steel & Power Ltd welcomed the government’s decision. “We are the only other supplier in India for rails, so it is a clear advantage to us,” Kapil Mantri, the corporate strategy and business development head of Jindal Steel & Power said to NDTV. He added that the company had the capacity to produce eight lakh tonnes of rail and universal beams.