The report of a ?committee on public procurement? brings to mind the story of six blind men who interpreted the elephant. There are six from the IAS (including one retired) and one each from the director general of supplies and disposal (DGS&D), director general (acquisitions) of the ministry of defence, director general CPWD (central public works department), a former director general (roads development), and a representative from the Railways, in a high power group of 11 wise men!
The blind men have not only tried to compare oranges with apples but also drawn conclusions based on incomplete and misleading data, possibly fed to them by interested parties.
As expected, the representatives of procurement agencies such as DGS&D, the ministry of defence and the Railways have strongly protested—in their respective dissent notes—against the biased conclusions based on selective facts.
In its collective wisdom, the committee has come to some amazing statements, one is that a crown jewel of Indian Railways, DLW (Diesel Locomotive Works) at Varanasi set up in 1961 in collaboration with ALCO (American Locomotive Company) that has manufactured over 6,000 locomotives, is merely indulging in ?screw-driver technology?.
Their remarkable conclusion is based on the state of the TOT (transfer of technology) by EMD (Electro Motive Division of the General Motors, now part of the Bombardier group) of 4000 hp locomotives, the manufacture of which was started in 2000-01, but only 500 of which have been turned out so far, a mere 10% of the overall production since 1961!
The august committee found that the EMD loco components have yet have to be fully indigenised, and so ended up calling the expertise at the 5,000-men DLW facility, with thousands of machinery, as ?possessing screw-driver technology for assembly of locomotives.?
The allegation that ?after over a decade of production at DLW, 35% of its procurement for EMD locomotives is from imports? is no longer true. It has since dropped to 20% and applies to only 10% of the overall production of DLW, and that too for items for which Indian vendors have not found the volumes large enough to make it economical to produce in spite of an assured market.
In some cases the Railways were forced to go back to the OEM (original equipment manufacturer), since the Indian vendor had repeatedly failed to maintain quality standards. The Railways cannot afford to let a mid-section locomotive breakdown of some critical part. For instance, the crankshaft for ALCO locomotives are still imported. Indigenisation would be welcome but is a costly step.
The Railways? representative rightly contested the charges, pointing to the ‘selective use of data with an intent to arrive at predetermined conclusions?.
The committee went into the details of the proposed new Diesel Locomotive Factory at Marhorwa, a parting gift of Lalu Yadav for Bihar, for which it has relied on a news report. It has also not shied from quoting a Planning Commission file noting by Gajendra Haldea, adviser to Montek Singh Ahluwalia. Perhaps the committee members did not bother to understand the mechanics of procuring expensive railway hardware such as locomotives, with technology transfer as its key component.
As in the case of automobiles, each locomotive design is unique and the connected indigenisation is a long-drawn process, with vendors setting up plant & machinery and developing expertise to manufacture, provided the volumes are large and the yield adequate.
The ALCO design inducted in 1961 has taken almost two decades to be fully indigenised, with a few components such as the crankshaft still being developed by local vendors on experimental orders. The Railways are still grappling with the indigenisation of EMD locomotive, and another new design at this stage would start the process afresh, not necessarily end up creating competition to help lower the costs as mistakenly assumed by some members o
Perhaps realising its flawed approach the committee has in its conclusion observed, ?After noting the above positions, the committee was of the view that as this is a specific case and the committee has to focus on the larger issues of public procurement policy, rules and standards, the matter may be left to the concerned ministry and the oversight mechanism within the government?.
So much for 175 pages of pure ?hot air?.
The writer is a former member, Railway Board. email: acharya@bol.net.in