The railway ministry may award a R26,000-crore contract for supply of coaches and locomotive components to Bharat Heavy Electricals Ltd (Bhel) on a nomination basis, going back on its earlier plan to invite bids from private firms under the public-private partnership (PPP) model.
The contract involves setting up of engine components and coach factories at West Bengal?s Dankuni and Kanchrapara regions, respectively, and long-term supply of coaches and components to the Indian Railway.
Over the last 15 months, the railways had been testing the projects under the PPP mode. It had shortlisted nine international engineering firms, including Alstom, Bombardier, Siemens, GE, Hitachi and Hyundai-Rotem, for financial bidding. Some of these players had even tied up with Indian firms, including Bhel and Titagarh Wagons. However, after shortlisting bidders, the railways restarted the process of due diligence and kept postponing financial bids.
The transporter is learnt now to have written a letter to Bhel, seeking its consent for accepting the projects on a nomination basis, under which a company doesn?t have to compete with other firms or submit any bid.
?We are evaluating award of projects on a nomination basis. We are in talks with Bhel for this purpose as we have had a previous relationship with the company. However, nothing has been decided so far,? railway board chairman Vinay Mittal told FE, refusing to elaborate. Emails sent to Bhel remained unanswered.
The proposal being considered by railways is in violation of the Central Vigilance Commission norms that discourage any government agency from awarding contracts on a nomination basis. In 2006, the Supreme Court had also ruled that nomination in government contracts should be adhered to only when there is no substitute available or the bids offered by companies are unfavourable.
The latest move of the railway ministry has come at a time when the government is working on removing corruption in procurement of goods and services by its constituents. A group of ministers on corruption has even taken note of report of a committee that revealed elements of graft in purchases made by railways. Government officials said railways should not change the nature of R21,000-crore Kanchrapara project from PPP without cabinet approval. ?A minister cannot unilaterally alter a cabinet decision,? one of them said.