Third Time Lucky? After Red Flags, Railways Reboots Rs 2,700 Crore Trainset Tender Yet Again

New Delhi: The Indian Railways has decided to discharge its Rs 2,700 crore tender process for manufacturing aluminium-bodied trainsets after the Department of Industrial Policy and Promotion (DIPP) raised red flags over deviations in the bidding criteria. 

A trainset is a group of coaches that are coupled mechanically and electrically and come with driving cabins at both ends. Generally speaking, the process of acceleration and deceleration is faster in a trainset when compared to trains that are hauled by locomotives.

As reported first in The Wire, the railway ministry took note of the DIPP observations on how certain tender conditions may have been in violation of the Narendra Modi government's public procurement process. The railways, according to sources, decided on March 15, 2018 to opt for a fresh tender.

Now it will be re-tendered with revised bidding conditions and an enhanced work order that will hopefully enable wider participation from interested players, sources close to the development said.

The railways' integrated coach factory (ICF) near Chennai had floated a global tender in late 2017 for the Rs 2,700-crore project, which involves the manufacturing 291 aluminium-bodied coaches. While pre-bid meetings had attracted seven global players, the last day for submission of bids saw only one interested consortium due to certain pre-bidding conditions. 

Among others, one of the pre-conditions was that the manufacturer should have five years experience of supplying to G8 countries, a requirement that was red-flagged by the DIPP.

Even though the last date of the bid submission was extended from January 29 to February 6, the Stradler-Medha consortium emerged only bidder after the the final submission of bids.

After the last date of submission, a leading Indian rolling stock manufacturer complained to DIPP drawing attention to the alleged violation of the public procurement order which resulted in elimination of other players.

Taking note of the complaint, DIPP secretary Ramesh Abhishek in a letter to Railway Board Chairman Ashwani Lohani observed that the eligibility conditions set in the trainset tender "prima facie seem to be non-compliant to the Public Procurement (preference to make in India) order".

Formulated by the finance ministry, the policy aims to ensure that the tender conditions are strictly in sync with the public procurement order taking into account the interests of Indian manufacturers. The DIPP had pointed out that "the stipulated requirement that the bidder should have an prior experience in supplying to G8 countries in the last five years would most certainly go against the domestic manufacturers and in favour of a restricted number of global players - there is no justification for taking supply to G8 countries as a condition."

After examining the issue, the railway ministry has decided to opt for re-tendering and communicated the same to the ICF. "It has been carefully examined in the board. It has been noted that the government of India policy 'Public Procurement - preference to make-in-India Order 2017' has not been fully implemented in the tender for procurement of trainsets," Railway Board communicated to the ICF.

"Keeping in mind that Railway Ministry is obliged to implement the provisions of Government of India rules in letter and spirit and that it is an opportunity of enhancing the tendered quantity which is likely to bring better competition and rates, it has been decided to undertake procurement de novo. ICF may therefore short-close the proceedings in the existing tender confirmation to this office," the directive to the ICF said.

Equipped with improved passenger comforts, automatic door system and 160 km per hour maximum speed, the trainsets with both seating and sleeper berths are expected to run on Rajdhani routes.

Second cancellation

Incidentally, this is the second time that the trainset tender is being discharged. The railway ministry’s attempts at procuring modern trainsets had to also be scrapped as none of the shortlisted bidders submitted the quotes citing inadequate work order.

Proposed to be manufactured at ICF, the ambitious project (known as Train-20) envisages the rolling out 15 light weight aluminium-bodied trainsets, a first in Indian Railways.

Now the work order in the revised tender is expected to increase up to 30 trainsets instead of just 15.   

Arun Kumar Das is a senior journalist and can be contacted at akdas2005@gmail.com

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