Vande Bharat Express: Why did Indian Railways cancel tender for 44 semi-high speed train sets? Explained

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August 25, 2020 12:19 PM

The fresh tender for the project will be floated within a week as per the Revised Public Procurement order. Moreover, preference will be given to 'Make in India' initiative.

The global tender was cancelled due to the outing of prices offered by three prospective bidders.

Vande Bharat Express trains tender cancelled: Recently, Piyush Goyal-led Indian Railways has cancelled the tender for manufacturing of as many as 44 sets of semi-high speed train sets (Vande Bharat Express Train sets). When the tender was opened for the supply of electrical equipment as well as other items for the 44 train sets, last month, CRRC Pioneer Electric (India) Private Limited, a Chinese joint venture company, had emerged as the only foreign player among the six contenders, according to a PTI report. The joint venture firm was formed between CRRC Yongji Electric Company Limited of China and Pioneer Fil-med Private Limited, based out of Gurugram, in 2015.

According to a press release issued by the Railway Ministry, the fresh tender for the project will be floated within a week as per the Revised Public Procurement order. Moreover, preference will be given to ‘Make in India’ initiative. The Integral Coach Factory (ICF) in Chennai, under Indian Railways, had floated the tender for making 44 semi-high speed Vande Bharat Express rakes or train sets on July 10. According to the Railway Ministry, the other five bidders were the state-owned Bharat Heavy Electricals Limited, the Electrowaves Electronics (P) Limited, the Bharat Industries, Sangrur, the Powernetics Equipment India Private Limited and the MEDHA Servo Drives Private Limited.

Why was the Vande Bharat Express semi-high speed train sets tender cancelled? 

According to an IE report, the global tender was cancelled due to the outing of prices offered by three prospective bidders. Recently, Chairman, Railway Board, VK Yadav said while processing the bids, it was found that the bidders, for some reason, had furnished information that indicated financial information as well. According to him, this is not needed at the qualification stage. Therefore, to maintain the highest standard of transparency, Indian Railways decided to cancel the tender.

The IE report quoted sources as saying that prices had been indicated by 3 bidders, of which the CRRC JV had quoted the lowest and a renowned Indian rolling stock company had been the second-lowest.

A line on the e-tender document stated that the tenderers have to fill all the mandatory fields of the techno-commercial bid details as well as financial rate page. The sources quoted in the report said the companies might have construed that they were asked to furnish prices. According to Yadav, Indian Railways has no idea why the bidders did that because, for these two-packet tenders, standard instructions are issued and based on them, many such tenders have been finalized.

While Piyush Goyal chaired Railway Ministry has maintained that the cancellation of the tender was done — eight months after it was called and more than a month after the submission was made. Another reason for the tender cancellation was to make way for a fresh tender adhering to the government’s new public procurement policy vis-a-vis Make in India initiative, the outing of prices, inadvertently or by design, the report said.

The manufacturing cost of the first Vande Bharat Express or Train 18, launched last year on Indian Railways network, saw an expense of Rs 100 crore, of which an amount of Rs 35 crore was alone for the propulsion system. According to officials, the present tender for 44 such kits would be worth more than Rs 1,500 crore.

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