Bidding intensifies for the Tender by Indian Railways

According to a government official, among the eight bidders who are competing for Indian Railways’ first global tender to supply 487,000 tonnes of rails, the most prominent ones are- Japanese trader Sumitomo Corp & India’s Jindal Steel and Power Ltd. The tender was drafted openly on Friday, 22^nd Dec.

The other popular bidders are East Metals AG, which is a unit of Russian steel and the coal producer Evraz, Voestalpine Schienen which is a Austrian company, the CRM Hong Kong Trading Ltd, the New Delhi-based Atlantic Steels, a French company, British Steel, France Rail and lastly the China-based Angang Group International.

The tender is supposed to end the monopoly of the state-owned Steel Authority of India Ltd. (SAIL) in supplying rails to the world’s fourth largest rail network of India. Heavy losses have made SAIL struggle to meet the railways’ rising demands.

The steel and rail ministries of India, however, have always been engaged in a head-on dispute over the state-run network’s decision to buy the required amount of rails from overseas. This problem continues to hamper the railways despite the assurances of supply from SAIL & the New Delhi-based Jindal Steel and Power.

After several meetings, the railways of India slashed its tender size by more than 30 % to 487,000 tonnes of rails after SAIL had said that it would scale up its supply to 950,000 tonnes in this year and 1.5 million tonnes in the next.

The committee which oversees domestically manufactured iron and steel products for several government projects is currently headed by the top civil servant in the ministry of steel.

The panel had also given a one-time waiver to the Indian railways to gather or buy the rails from overseas on one condition that, it would give 20 % of the contract to a domestic steel producer. This clause could help Jindal Steel in winning its first contract with the Indian railways.

The waiver came after a meeting held at PM Narendra Modi’s office on Dec. 19 between officials of ministry of steel and the Minister of Railways, Piyush Goyal.

Prime Minister Modi’s office recently asked all the government departments to prioritise the use of local assets in state projects, after domestic companies had objected to the open tender by the Indian railways.

-Archit