Companies, shortlisted for financial bidding for two locomotive factories in Bihar, have objected to proposed changes in project documents by Indian Railways. They said the price of supplying engines will increase if the alterations are implemented.
The reservations were conveyed to railway board members at a pre-bid meeting with five shortlisted bidders-GE, Electro Motive Diesel, Bombardier, Siemens and Alstom-on December 22, two persons familiar with the development told FE. The meeting was called to discuss changes in key features of R60,000-crore projects to set up two engine manufacturing units in Madhepura and Marhaura in Bihar.
Railways had proposed that the winning bidder will have to transfer technology to Indian Railways for maintenance of locomotives. In the original bidding documents, all locomotive had to be maintained by the winning firm but in the changed papers, railway restricted private player’s role to production of engines. ?Railways demanded that the responsibility of proper maintenance of engines should be borne by the private sector even though railways will do all the maintenance works. This was not acceptable to bidders,? one of the officials who attended the meeting said.
The transporter also suggested reduction in lease period of land from 50 years to 30 years, while reducing the scope of price escalation in price of engines by increasing fixed component in the price of locomotives from 15% to 20% ? which means only 80% of the price will be linked to inflation.
Bidders were of the view that if proposed changes are brought into effect, the base price of engines will increase substantially as they will have to include the cost of technology and compensate themselves for the lesser scope of price escalation later. ?Indian Railways will have to look at the documents again to account points raised by the bidders,? a senior official in railway ministry said.
The reservations have come at a time when railways is trying to award the projects before presentation of Rail Budget 2012-13, which is likely to be scheduled for March, so that it can project itself as an investor-friendly entity.
Contracts for setting up the two units are pending for last four years. Union cabinet had cleared a diesel locomotive project at Marhaura in 2006 and an electric engine factory in Madhepura the following year. The five bidders were shortlisted in 2010 but financial bidding has been was a dozen times as railways took on the task of redoing bidding documents for the projects.
