The railways, for the first time, floated a global tender for 4.8 lakh tonne of rails as it was estimated that SAIL, with which the transporter has a memorandum of understanding, would not be able to fulfill the requirement.
Jindal Steel and Power (JSPL) on Tuesday said that it has won 20% of the Rs 2,500-crore global tender by the Indian Railways to supply long rails, making it the first entity apart from Steel Authority of India (SAIL) to provide rails to the transporter.
The award of the order to supply close to 1 lakh tonne of rails to JSPL comes as the conclusion of the global tender, which saw participation from eight bidders, the company said in a release.
The railways, for the first time, floated a global tender for 4.8 lakh tonne of rails as it was estimated that SAIL, with which the transporter has a memorandum of understanding, would not be able to fulfill the requirement. For 2017-18, SAIL had committed to supply 11.45 lakh tonne rails but fell short by 3.14 lakh tonne.
According to a government source, the balance requirement of rails not met through the tender may be fulfilled with indigenous manufacturers. According to a government official, with JSPL coming in as a supplier, it is a comfortable position for the country as there will be zero imports of rails. “Between SAIL and JSPL, there is enough capacity to supply the required amount of rail. In case there is a gap in supply by SAIL, now there is another indigenous company in line to fulfill the demand,” said the official. However, SAIL will probably be given the first right of refusal to fulfill the additional demand before roping in JSPL.
The other seven bidders for the global tender did not qualify on technical basis, said the source, adding that the company got the order under the Make in India clause in the tender. JSPL is the only domestic firm apart from SAIL which manufactures rails.
The other bidders were Sumitomo Corp, Angang Group International, Voestalpine Schienen, East Metals, CRM Hong Kong, British Steel France Rail and Atlantic Steel. JSPL will supply the said one-time order over a period of one year. The firm has been supplying rails for the upcoming dedicated freight corridors.
According to the source, though no global company qualified, the advantage of going through the tender process was that a competitive rate at which JSPL will supply rails got decided, which is lower than the price at which SAIL supplies rails. “Also, since the requirement of rails is increasing it makes sense to increase the basket within India also,” added the source.
The requirement of the rails has gone up as the railways has renewed its focus on track renewals following the spate of unfortunate railway accidents last year, which claimed multiple lives and then-railway minister Suresh Prabhu decided to step down.
Soon after taking over of the ministry by Piyush Goyal, he announced that a global tender will be floated to fast-track the doubling of lines and new projects. He had said that he has ordered diversion of all available tracks to track renewal so that the the existing tracks can be made safer.